Disinvested PSUs & their Profit/Loss Journeys: Part I – 2004-05 to 2012-13

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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 the history and political trends of disinvestment in the country. In this article, we look whether the Public Sector Undertakings (PSUs) disinvested during 2004-05 to 2012-13 were incurring profit or loss around the year of their disinvestment.

In the previous article, we outlined the three approaches to disinvestment, namely, Minority disinvestment, Majority disinvestment, and Complete 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 the following ways:

Year-wise Disinvestments

Now, let’s take a look year-wise break-up of disinvestments from 2004-05 to 2012-13. In the following table, the mode and type of transaction describes the way in which disinvestment was carried out (broadly discussed above). Residual equity with government describes the post-transaction equity of the government in 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 the following table, the profit and loss data has been recorded for three consecutive years around the given year of disinvestment. All profit values are recorded as (+) entries and loss values as (-) entries.

*Data not available in Public Enterprise Survey Reports.

There are a few notable observations:

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