Professional Documents
Culture Documents
DISINVESTMENT - DEFINED
Meaning of Investment
Converting
Money Claims Securities Into Money or Cash
DISINVESTMENT IN A P.S.U
Transfer of Government Ownership when the dilution is beyond 51 % Imperative for the Government to sell a part of its holdings
PSU
Transfer Of Ownership
Government
Government Holdings
Governments Strategy
Meet the growing budget deficit The Government knew that they could make more money by selling off their assets cheaply Faster realization value
Atomic Energy
Minerals specified in schedule to atomic Energy (Control of Production and Use) Order, 1953
Railway Transport
Methods of Disinvestment
Reduction in Equity
Buy
Other Methods
DISINVESTMENT PROCESS
Selection of PSU by MODI Approval by CCD Formation of IMG & Selection of Global Advisors
2-3 months
Discounted cash flow Net asset value' approach Profit Earning Capacity
BALCOs Disinvestment
Fact File
Mines
Company running on Outdated technology. Cash reserve 500 Cr. not adequate for Modernization
Company recovered from state of sickness and hence right time for sale.
Valuation Conundrum
Valued on 4 Parameters (JP Morgan)
Discounted
Analysis Paralysis
Reserve Price fixed at 514 Cr. using 25% mark up to the valuations arrived by DCF Model
Hue and cry by Opposition over valuation methodology Question Earnings Vs Asset Value
The Verdict
Sterlite Industries emerges as the highest bidder with an offer of 551 Cr.
Threat of damage to companys assets Supreme Courts role Union Management Meetings Agreement Signed
SUGGESTIONS