Govt seeks CVC nod for new norms for advisors

The Government has sought the opinion of the CVC to change the norms for appointing investment bankers for advising it on divesting its stakes in the companies it runs.

Last year, the Government had identified over 60 Central public sector undertakings for disinvestment over the next few years to bridge the gaping fiscal deficit and fund its social sector and infrastructure programmes.

Under the plan, the Centre would dilute up to ten per cent of its stakes in those CPSUs which are unlisted through IPOs and those already listed would have to dilute up to 15 per cent through follow-on public offers to meet Sebi guidelines.

The proposed regulations would help the Government modify the criteria of choosing investment bankers from cost- basis to quality-cum-cost basis, as the current norms put those advisors who do not have deep-pockets at a disadvantageous position.

The objective is to give more weight to the quality of these advisors and not just cost.

Currently, the investment bankers are selected on the cost-basis under which the technically qualified investment bankers are selected on the basis of the lowest bid.