Govt may exit ITDC, Quotes Media Reports

Govt may exit ITDC, Quotes Media Reports

Valuation and financial transaction discussions are in final stages, sources said.
aThe Disinvestment drive is in full swing since FY 2018. Valuation and financial transaction discussions are in final stages, sources said.

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According to a published media report the government with its divestment drive on in full swing might completely exit from India Tourism Development Corporation (ITDC). The point to be considered is that since the beginning of FY18 Government has sheded it’s stake in NALCO.

The said media report says that government may announce its exit from ITDC in the next 4-5 weeks and has listed 3 ways in which it may do so.

Firstly, it could give states right to sell or give ITDC hotels in states on lease. Secondly, for centre-owned ITDC hotels, government may give them to private companies on lease. Thirdly, for joint ownership of centre and state, such hotels may be given to private companies on lease.

The source further added that Madhya Pradesh and Assam state governments have agreed to sell their stake in Ashok Hotel while the centre may put up hotels in Jaipur, Mysore, Patna and Bhubaneswar on lease.

The central government owns 87 percent stake in ITDC. A complete exit could help it garner Rs 4400 crore, as per yesterday’s closing price.

The government had set out with an ambitious divestment target of Rs 72,500 crore for FY18. The target is to be achieved via minority stake sale totalling Rs 46,500 crore, strategic stake sales worth nearly Rs 15,000 crore, and listing of various insurance companies to add Rs 11,000.

After the newsbreak, the stock saw a sharp 15 jump to levels of Rs 618 per share.

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