About a dozen loss-making state-run firms including Hindustan Photo
Films and Scooters India may be delisted from stock exchanges on
absence of revival prospects and investor interest to meet the new
listing norms.
"There is no or little trading in these scrips,'' said a senior
finance ministry official. ``Most of them are sick or have virtually
closed their operations. They'll not be able to generate any interest
if put under the disinvestment process,".
The companies that may be delisted include India Tourism Development
Corp., Brahmaputra Valley Fertiliser Corporation, Scooter India,
Hindustan Photo Films, Maharashtra Elektrosmelt, Hindustan
Flurocarbons, Kudremukh Iron Ore., HMT, ITI, and FACT.
A new rule stipulates that at least 25% of the company should be held
by public for it to remain listed on the stock exchanges. In some
companies such as miners NMDC and Hindustan Copper, the government is
selling a part of its holding and some news shares to comply with the
rules. But many companies such as Hindustan Photo have failed to
revive despite attempts by the government.
The cabinet committee on economic affairs last month approved a Rs. 68
crore revival package for some including HMT, Hindustan Photo Films,
Triveni Structurals, Tungbhadra Steel Products, Nepa, and Scooters
India. But a clear turnaround for all appears remote.
"Revival or closure of these companies is still to be worked out. Some
of these companies have shown profit due to the revival packages. The
interim financial support was provided so that the current operations
should continue," the ministry official said.
The government so far has provided Rs 15,253 crore for 55 loss-making
state-run companies. Their accumulated losses rose 40% in 2008-09 to
Rs 14,424 crore, from Rs 10, 257 crore a year earlier. 54 of the 213
state-run companies posted losses. in 2008-09.
"A stock exchange can delist a company if it has been making losses
for three consecutive years or has a negative networth. Most of these
companies fall in that bracket," said the official. ``We also have to
consider what kind of exit option can be given to existing
shareholders."
--
Thanks & Regards,
Abhishek Kothari
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