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Anil Agarwal suggests recast of India's asset sale 'style'

Policies should be easier and govt should cut stake to 50% in all PSUs, says the Vedanta Resources chairman.

, ET Bureau|
Updated: Oct 14, 2019, 06.10 AM IST
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ET Bureau
Anil Agarwal suggests recast of India’s asset sale ‘style’
“If you carry out the process company by company, it may take a long time,” Agarwal said.
MUMBAI: One of the successful conglomerates to participate in the Atal Behari Vajpayee government's disinvestment in Hindustan Zinc and Balco, which later transformed in scale and profits for his group, Vedanta Resources chairman Anil Agarwal feels the State should revisit its 'style' for a speedier and smarter transfer of its assets to private players.

In an interview with ET late last week, Agarwal said that going by the way the government has put a fresh batch of assets on the block, it may take "20 years (a long time, he meant)" for an effective disinvestment to take place. "If you carry out the process company by company, it may take a long time," he said.

"My suggestion which, I feel, is possible and will find little objection is for the government to bring down its stake to 50% (in all state-owned companies). You get enough cash for the diluted stake, and the company gets an independent board and chief executive. Also, with a 50% stake, the company will be treated like a normal corporate and will not have to report to the Comptroller and Auditor General (CAG)," Agarwal said.

The Union Cabinet had earlier this month approved a new process to strategically dilute stake in some government enterprises like Bharat Petroleum Corp Ltd, Shipping Corporation of India, Container Corporation (Concor), North Eastern Electric Power Corporation (NEEPCO) and THDC.

Vedanta has the largest private sector oil and gas exploration company in India through Cairn Oil & Gas. Asked if it would be interested in BPCL, Agarwal seemed guarded and said the company is waiting for more clarity in disinvestment terms.

Vedanta has been one of the players at the forefront of buying and turning around both government and private stressed assets in the country - be it Hindustan Zinc or Balco or the more recently acquired Electrosteel.

While the country's largest aluminium producer will be looking out for stressed power assets to serve its facilities, Agarwal said certain aspects need to improve to attract investor interest. He identified forest clearance as a major hurdle in the ease of doing business and batted for “self-certification”. India also needs a “natural resource policy” because of the falling oil exploration rates, he said.

Agarwal called the ongoing slowdown in demand a “slackness” due to the USChina trade war. “Demand in India has definitely come down. Some recession is there but it is very temporary,” he said.

Vedanta is in talks with Japanese players for technology for its ambitious $10-billion LCD panel project that is expected to bring down the import of flat panel displays, semiconductors etc. ET had reported in June that the project may fall flat due to failure of getting requisite subsidies.

“We have definitely not given up on it. It’s taking slightly more time but within three months, we will be in a position to announce something,” Agarwal said. He plans to bring the project up in Nagpur, Maharashtra.

The company is also looking at producing 1,400 tonnes of silver through Hindustan Zinc, while it is doubling the production at Electrosteel to 3 million tonnes and take it to 5 million tonnes later.

Agarwal, however, said he wants to stay on in iron ore mining and steel making is a mandate to add value to the ore. “I want to always remain in mining (for iron ore). My vision is to create the next Palabora Mining Company,” he said.

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