SBI Capital, Anarock, KPMG, 8 others to provide transaction advisory services for asset monetisation of CPSEs

In a push to asset monetisation of Central Public Sector Enterprises (CPSEs), the Centre has empaneled 11 firms to provide consultancy services. Monetisation is key to disinvestment where non-core assets are taken out and sold or leased out separately for better valuation.

The firms include SBI Capital Markets Limited, CBRE South Asia Private Limited, Ernst &Young LLP, Cushman Wakefield India Private Limited, KPMG Assurance and Consulting Services LLP, Deloitte Touche Tohmatsu India LLP, Colliers International (India) Property Services Private Limited, Anarock Property Consultants Private Limited, Jones Lang La Salle Property Consultant (India) Private Limited, Darashaw & Company Private Limited and Rites Limited, an order by National Land Monetisation Corporation (NLMC) showed.

In February, the agency floated a request for empanelment of consultancy firms for providing transaction advisory services for monetisation of assets of CPSEs and other government agencies. The selected firms will assist NLMC in “formulating the monetisation strategy, conducting techno-economic feasibility studies of each of the assets and provide end to end transaction advisory services and ensure completion of transactions for monetisation of the assets.”

The request document mentioned that many of these non-core assets are diverse, spread out across the country and are sub-optimally utilised and can be appropriately monetized to create greater financial leverage and value for the companies and the Government, being the shareholder.

Interestingly, Union Budget for FY24 is silent on monetisation. The Budget also scaled down the estimate under ‘Miscellaneous Capital Receipts’ to ₹61,000 crore in FY24 from ₹65,000 crore of FY 23 (BE), though it is slightly higher than Revised Estimate of ₹61,000 crore.

Miscellaneous Capital Receipts’ comprises of part sell of government equity in CPSE, strategic disinvestment, monetisation and other such transactions. Also, being last year before the before, experts do not see much action on monetisation, still move to empanel advisors being seen as intention for big push to monetisation.

NLMC undertakes monetisation of surplus land and building assets of CPSEs and other government agencies. Setting up of this body is in pursuance of the Budget announcement for 2021-22.  With monetisation of non-core assets, government would be able to generate substantial revenues by monetising unused and under-used assets and at the same time monetisation of surplus land and non-core assets will help in unlocking value of CPSEs, going for strategic disinvestment.

During the budget session, in response to multiple questions, Minister of State for Finance, Bhagwat Kishanrao Karad had said in Lok Sabha that no specific target for non-core asset monetisation was given for the FY21-22 and 22-23. For core assets, as per the information received from NITI Aayog, sectoral targets are mapped to various ministries including Road Ministry, Railway Ministry, Power Ministry, Shipping Ministry Civil Aviation Ministry and Oil Ministry under the National Monetisation Pipeline (NMP).

“During FY 22-23, based on the updates collated from the line ministries & departments till the end of January 31, 2023, proposals with an estimated monetisation value of about ₹76,000 crore were completed by various ministries and submitted for review,” Karad had said in a written response. Talking about FY22, Karad informed that transactions with aggregate monetisation value of about ₹97,000 crore in terms of accruals or private investments were completed.

Launched in August 2021, NMP aims at enabling accelerated infrastructure creation and bringing efficiencies in infrastructure operation and maintenance for a multiplier impact on the economy.