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100% Equity Disinvestment by Government in Scooters India

The Indian government is planning a complete disinvestment of all their equity holdings in the company called Scooters India Limited. This information was released by the Department of Heavy Industry back in May. The disinvestment of this equity is based on the government finding a strategic buyer that will go through an auction process with 2 stages. The Department of Heavy Industry will be conducting this 2-stage auction on behalf of the Indian government.

The Department of Heavy Industry has administrative control over Scooters India Limited since it is a central public-sector enterprise. The company was first incorporated way back in 1972 and since then, the government has obtained over 93.74% of the company’s shares. The public owns only 2.32% of the shares and the Special National Investment Fund owns 3.94% of the shares. Now, before the disinvestment deal takes place, all the assets of the company will be appraised for their true value. This includes the company’s buildings, land properties, fixtures, furniture, walls, roads, drains, inventory, electrical machinery, and other stock.

There is a lot of criteria laid out by the government in which the buyer must follow in order to purchase the complete stake in Scooters India Limited. Firstly, the buyer must conduct a minimum of 3 separate valuations of the company’s assets within the last 5 years, reported The Economic Times. The value of the assets being appraised must be Rs. 100 crore or higher. Lastly, the buyer needs to have a yearly turnover of at least Rs. 5 crore for 2 financial years within the last 3 of them.

There will be a technical evaluation conducted on all the interested buyers that have expressed a serious interest in purchasing all the equity shares in the company. Once they have been proven qualified to purchase the shares, they will be able to make their financial bid for them.

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