Share market traders welcomed speculations of divestment of shares in Dredging Corporation of India, a miniratna company.
Stock prices of Dredging Corp surged by up to 16.7% on Monday morning.
The government, which holds 73.47% in the state-owned company might sell off 51% of the company -- a Cabinet for which has been prepared, and will be circulated for comments, government officials said.
Dredging is one of the many state-owned companies that the government wants to sell stakes off. Last week, there were speculations of a divestment in Air India, but later on, the government denied to have taken any call on the carrier.
Air India is undergoing a turnaround, and is expected to become profitable by 2022.
If stake sale in Dredging Corp, goes through, it will be the beginning of a long awaited plan to sell stakes in PSU companies.
In October, the cabinet had “in -principal” approved strategic sale in some state-owned firms. NITI Aayog, the government think tank, would recommend these companies. “Strategic sales will involve a change in management control. Some of these are important units. Since each unit will be considered at its own merit, timing will also be decided accordingly. Valuations will also be done,” finance minister Arun Jaitley had said in October.
Though the government has not discussed the exact number of companies where these stake sale will happen, but Jaitley had mentioned that it will be a mix of loss-making and profitable units, where the government will bring down its stake to less than 50%.