Exclusive: Land Bank policy ready, awaiting cabinet nod; Big Breaking for MTNL, HMT, Scooters India

The central government is all set to do an asset monetisation of PSU (Public Sector Unit) companies by unlocking the land value under the Land Bank policy which was in deliberations for months now, reports Executive Editor Swati Khandelwal in a Zee Business Exclusive on Friday. 

According to sources that tell Jain, “The Department of Investment and Public Asset Management (DIPAM) in consultation and association with NITI Aayog has formulated a Land Bank policy which is subject to be cleared by the Cabinet soon.” DIPAM took around two years to formulate this policy. 

See Zee Business Live TV Streaming Below:

“An SPV (Special Purpose Vehicle) will be formed through which these PSU lands will be transferred under the policy, which is yet to be public,” she said citing her top sources. “The government will give one-third or 33 per cent of the value of land upfront to the PSU companies.” 

Moreover, this SPV land transfer under the policy will be exempted from stamp duty, considered a huge hurdle. The transfer of land will be in tranches and loss-making companies would be on priority. 

#ZBizExclusive | लैंड बैंक को लेकर DIPAM का बड़ा फैसला...

बीमार PSUs के लैंड की वैल्यू अनलॉक करेगी सरकार, लैंड बैंक पॉलिसी को जल्द कैबिनेट से मिलेगी मंजूरी- सूत्र

अनिल सिंघवी की राय- MTNL पर करें फोकस#DIPAM #PSU @AnilSinghvi_ @SwatiKJain pic.twitter.com/rW5zecZ3oY

— Zee Business (@ZeeBusiness) May 28, 2021

This policy is for all PSUs, however, the major focus is on stale PSU companies such as MTNL, Scooters India, and HMT. The government is calling this a win-win situation for all stakeholders The government is attempting to do a value maximisation of land and improving the health of redundant PSUs, which have great value for their assets, Khandelwal further said.  

In this regard, Zee Business Managing Editor Anil Singhvi pointed out that this exclusive information will mostly help those PSU companies, which have the possibility of revival - the likes of MTNL (Mahanagar Telecom Nigam Limited) whose only liability is giving VRS (Voluntary Retirement Money) to its employees which is around Rs 2000-3000 crore as against Rs 10000 crore in assets of land. 

With the 5G roll-out and through the transfer of MTNL’s land to SPV, the loss-making PSU will have an advantage of revival as the government has decided to give upfront 33 per cent of their land value, Singhvi added. And, the telecom company has huge land assets at prime locations in Delhi and Mumbai. 

While stale PSUs’ such as Scooters India and HMT, which have zero revival chances, may see their land bank made into SPV and sold. The money from this is expected to be used to settle the creditors, the Market Guru said.