India will look to sell assets of eight shuttered companies under the heavy industries ministry this fiscal, continuing the government’s efforts to restructure and disinvest many state-run enterprises in non-core sectors, said government officials familiar with the plans.
The ministry has 24 companies under its administrative control, of which 15 are operational, one is being revived, and the remaining eight are to be closed. Besides, another 17 are under liquidation and are currently under the purview of the official liquidator.
The companies that have been closed are three units of HMT, namely HMT Watches, HMT Chinar Watches, and HMT Bearings Ltd. The others are Hindustan Cables, Tungabhadra Steel Products Ltd (TSPL), Bharat Pumps and Compressors, Scooters India and National Bicycle Corporation of India, according to the ministry’s recently-released report for FY22.
In the case of Bharat Pumps and Compressors and Scooters India, the transfer of land and other immovable and movable assets is at an advanced stage. The government decided to close the two units based in Uttar Pradesh in 2020 after repeated efforts for strategic sales failed.
According to the ministry, the closure of TSPL is at an advanced stage, and most regulatory requirements have been met. The ministry is also proceeding with the disposal of immovable assets to implement the Union cabinet’s decision to close Hindustan Cables.
The cabinet had directed closing of the underground telephone cable manufacturer in 2016, while in the case of TSPL, cabinet approval was accorded in 2015.
Further, among the operational companies under the ministry, Madhya Pradesh-based newsprint company NEPA is now being revived. The company was referred to the erstwhile Board for Industrial and Financial Reconstruction in 1998 as accumulated losses completely eroded its net worth as per annual results of 1996-97.
Production at the company has remained suspended since July 2016. It is currently undergoing a revival and mill development plan approved by the cabinet.
The heavy industries ministry did not respond to a query till press time.
According to the ministry’s report, money-losing companies suffer from a number of factors, including poor order book, shortage of working capital, surplus manpower, obsolete plant and machinery, difficulty in adjusting to changing market conditions, products profile or technology and fierce competition.
“Several of these loss-making CPSEs have problems of a large workforce and huge overheads, far above the industry norms,” said the report. The 16 companies have 51,856 employees in total.
The money-losing companies under the ministry’s ambit are Bharat Heavy Electricals Ltd, Heavy Engineering Corporation Ltd, HMT (Machine Tools), Rajasthan Electronics & Instruments Ltd, NEPA and Engineering Projects (India) Ltd. These companies are expected to have incurred a consolidated loss of ₹ 843.89 crore in the just-ended fiscal, narrowing from a loss of ₹4,036.56 crore in FY21. According to the report, these companies are expected to narrow their combined losses to ₹474.81 crore in the current fiscal year.