New Delhi. December, 2015. As per the extant Disinvestment Policy of the Government, unlisted Central Public Sector Enterprises (CPSEs) with no accumulated losses and having earned net profit in three preceding consecutive years are to be listed. Among the Defence Sector CPSEs, which are wholly owned by the Government, the Cabinet Committee on Economic Affairs (CCEA) has already approved disinvestment of 10% paid up equity of Hindustan Aeronautics Limited (HAL) out of Government of India’s shareholding of 100% through an Initial Public Offering (IPO) in the domestic market as per the Securities and Exchange Board of India (SEBI) Rules and Regulations.
Apart from raising financial resources, the listing of Companies on Stock Exchanges has the following benefits:
- The listed companies are mandated by Company Law / SEBI / Stock Exchanges to comply with higher level of disclosures. This will bring greater transparency and credibility;
- With the induction of independent directors, management accountability, competencies and performance are enhanced;
- Investor centric research provides on a regular basis a third party professional assessment of ricks as well as future prospects to management to help it benchmark its business model with the industry.
- Listing of profitable CPSEs on the stock exchanges with a mandatory public ownership of shareholding has been observed to increase significantly the value of the Enterprise and Government’s residual shareholdings as well as that held by the public post-listing.
- Listing also provides development of people-ownership of CPSEs, thus encouraging participation and sharing in the prosperity of CPSEs.
