Need to rationalise existing guidelines of CPSEs
Mr. Neerja Kumar Gupta, Secretary, Department of Investment and Public Asset Management
MUMBAI, 4 October 201 (GPN) : There is a need to rationalise the existing guidelines of CPSEs to comprehensively capture various aspects of capital restructuring and focus on expansion of economic activities by CPSEs and optimum return on investment. The government has adopted a multi-pronged approach to manage its investment in CPSEs, said Mr. Neerja Kumar Gupta, Secretary, Department of Investment and Public Asset Management, in the session on ‘Managing Investments in CPSEs for Growth’, at the 13th edition of FICCI’s annual Capital Markets Conference ‘CAPAM 2016’.
While delivering his keynote address, Mr. Gupta said that disinvestment of CPSEs through minority stake sales; listing of profitable CPSEs and strategic disinvestment was one of the approaches. Also government was managing investment in CPSEs by capital restructuring for optimising returns on investment and financial restructuring for revival and strengthening of CPSEs. However, the real challenge, the Secretary said was to work out the backward and forward linkages.
The government was looking at strategic disinvestment by exiting from non-strategic business; promoting efficiency and professional management of the company and unlocking optimum economic potential of business enterprises, he added.
Highlighting the investment opportunities in India, Mr. Gupta said that investment in G-sec papers with fixed demand which is uniformly spread over the years and auction schedule announced in advance. Other options were equity investment in CPSEs, strategic disinvestment and exchange traded fund.
Giving an overview of the Indian capital market, the Secretary said that the annual return has been 11.3% over the last two decades. The Indian capital market has been performing better than other emerging economies like China, Korea and Brazil. India is among the best performing markets in its peer group.
The keynote address was followed by a discussion and the panellists were Mr. Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas & CO; Mr. Sanjay Sharma, Managing Director, Deutsche Equities India Ltd.; Mr. Atul Mehra, Managing Director and Co-CEO, Investment Banking, JM Financial Limited and Ms. Pratibha Jain, Partner & Head, Nishith Desai Associates.
The session was moderated by Mr. Anup Bagchi, Co Chairman, FICCI Capital Markets Committee and MD & CEO, ICICI Securities Limited.
