Disinvested PSUs & their Profit/Loss Journeys: Part I - 2004-05 to 2012-13
Sai Krishna Muthyanolla
April 8, 2020
In an earlier article, we looked at disinvestment history of various governments and the amounts earned through them. In this story, we look at the individual companies and their status at the time of disinvestment.
In Factly’s earlier article we briefly looked at thehistory and political trends of disinvestment in the country. In this article,we look whether the Public Sector Undertakings (PSUs) disinvested during2004-05 to 2012-13 were incurring profit or loss around the year of theirdisinvestment.
In the previous article, we outlined the three approaches todisinvestment, namely, Minority disinvestment, Majority disinvestment, andComplete disinvestment or privatization.
Disinvestment of a minority stake in PSUs is broadly carried out in the following ways:
Disinvestment of a majority stake in PSUs is broadly carried out in thefollowing ways:
Year-wise Disinvestments
Now, let’s take a look year-wise break-up of disinvestments from 2004-05to 2012-13. In the following table, the mode and type of transaction describesthe way in which disinvestment was carried out (broadly discussed above). Residualequity with government describes the post-transaction equity of the governmentin the said PSU.
The data is sourced from the Department
of Public Enterprises, from their Annual Year Books and Public Enterprises Survey Reports.
Are these PSUs profit or loss
making?
Now,let’s look at the trend of profit and loss for the disinvested PSUs. In thefollowing table, the profit and loss data has been recorded for threeconsecutive years around the given year of disinvestment. All profit values arerecorded as (+) entries and loss values as (-) entries.
*Data not available in PublicEnterprise Survey Reports.
There are a few notableobservations:
Featured Image: Disinvested PSUs