The government has already approved 20% share sale in the steel major, which will include 10% equity dilution by the government and the company raising fresh equity in the same proportion
The government today said that it is targeting to raise Rs18,000 crore through the 20% share sale in the country's largest steel-maker SAIL, reports PTI.
“At current prices, total receipt from the disinvestment and issue of fresh equity would be approximately Rs18,000 crore,” steel minister Virbhadra Singh informed the Rajya Sabha today.
The minister, however, said, “The actual amount that would be raised through disinvestment as well as from FPO would depend on a number of factors, including the prevailing market conditions, share price and the investors’ interest at the time of the actual disinvestment.”
The SAIL counter today closed at Rs218.55, down 1.38%, on the BSE.
The government has already approved 20% share sale in the steel major, which will include 10% equity dilution by the government and the company raising fresh equity in the same proportion. At present the Centre holds about 85% stake in the steel major.
The Centre is likely to go ahead with divestment in 12-15 public sector units, including SAIL, Coal India, Hindustan Copper, SJVNL and EIL—among others—in the current fiscal to raise about Rs40,000 crore.
The government had announced new FDI norms last year that say that if indirect FDI in an Indian company exceeds 50%, its investment in subsidiaries will be treated as foreign investment
The government today said that ICICI Bank and HDFC Bank cannot be called ‘Indian-owned’ banks, setting at rest the debate generated over the nationality of the top two private sector lenders, reports PTI.
“At best, these two can be called as Indian-controlled banks,” DIPP secretary RP Singh said today when asked about the government’s stance in the wake of the two seeking clarifications on the matter.
“ICICI Bank managing director & CEO (Chanda Kochhar) met me day before yesterday, she has discussed (the issue) with me,” Mr Singh said.
ICICI Bank had maintained that it continues to be an Indian bank as both its management and board were Indian.
However, both ICICI Bank and HDFC Bank have over 74% foreign holding, including that of foreign banks and overseas institutional investors.
“Banks will be covered in one paper which we are trying to bring out on the financial aspects totally,” Mr Singh said, referring to the six discussion papers on FDI that the Department of Industrial Policy and Promotion is planning to bring out soon.
“You know the definition of what is a company controlled by Indians and what is the definition of a company owned by Indians,” Mr Singh said.
Going by the definition, both entities are certainly banks not owned by Indians, because equity of at least 74% or around 74% is from outside, he pointed out, buttressing the government's stand.
But they can be construed as banks controlled by Indians if the majority of directors are Indians and right to directorship is with Indians. So depending upon that, both banks are construed as banks controlled by India, but they can certainly not be called banks owned by Indians.
“There is a way of resolving their problem. We will try to find a solution for that. The handicap they are suffering, we will try to resolve,” Mr Singh said.
The banks’ claim that they are Indian is significant in the light of the government announcing new FDI norms last year that say that if indirect FDI in an Indian company exceeds 50%, its investment in subsidiaries will be treated as foreign investment.
Moreover, in calculating indirect foreign investment in an Indian entity, the sum total of FDI, stake from Non-Resident Indians, American and Global Depository Receipts, foreign currency convertible bonds and convertible preference shares will be taken into account.
Both ICICI Bank and HDFC Bank have insurance ventures, where FDI is capped at 26%.
Policyholders will have to wait a little longer to get clarity on issues that are plaguing the TPA-doctor relationship
The issues over administration of cashless facilities provided by insurers for hospitalisation between city-based doctors and third-party administrators (TPAs) who facilitate medical insurance, have yet to be resolved. Policyholders will have to wait a little longer to gain more clarity on these issues, as both TPAs and the medical community have still not come up with any concrete provisions.
According to the Association of Medical Consultants (AMC), TPAs have been giving out impractical ideas for implementation, while TPAs claim that doctors are being stubborn.
In March, miffed over low rates and unpaid dues from TPAs, about 1,500 nursing homes and various doctors under the AMC banner had decided to boycott TPAs completely. This drastic measure meant that patients in hospitals covered by these TPAs could not avail of cashless facilities.
“Talks (between TPAs and doctors) will still take time and with TPAs not giving us anything to go with, one can’t predict how long would these talks take to conclude,” says Sudhir Nayak, honorary secretary, AMC.
According to Mr Nayak, TPAs are trying to push discount offers based on the number of patients admitted to a hospital and a policy of ‘best-preferred’ hospitals. Both these TPA schemes have been rejected by doctors. According to the discount offer policy being pushed by TPAs, hospitals would get a 10% concession if they were to provide Rs10 lakh of business; the best-preferred hospitals scheme will see TPAs choosing 50 hospitals for working with them.
“How can you ask hospitals and doctors such things? We can’t provide them such business on a regular basis. It won’t be fair on the profession. And the best-preferred hospitals scheme will definitely not go down well with nursing homes. Only those who have good relations with TPAs will be on the list,” says Mr Nayak. He also adds that this scheme is not feasible.
However, Dr Nayan Shah, managing director, Paramount Health Service, says that these policies are being preferred by some hospitals. “It’s a business and some hospitals are looking for some kind of concessions. It all depends on the hospital,” he said.
However, Mr Nayak also argues that TPAs have been misinforming their customers and payments have not been coming on time.
In the midst of this, corporate health insurance is become an expensive business for insurers. Premiums have shot up, but claims are also going up. Many industry experts believe that health insurance companies are in a lose-lose situation.
“The claims ratio in the corporate group health insurance segment is over 100% in most cases,” said Balaji C, Bharti AXA’s head of underwriting.
He also added that insurance companies are trying to manage the cost of claims, putting in place better customer service and opting for in-house TPAs. Private insurance companies like ICICI Lombard and Bajaj Allianz have done away with TPAs. By the end of this year, Future Generali will have its own in-house team to service health policies, instead of making customers deal with TPAs for facilitating medical insurance payouts.
“TPAs have not been able to live up to the service standards that had been expected from them when they were introduced. For us, as an insurer, it would be better if we have our own team which can interact both with the customers and hospitals directly, to ensure that our clients are getting prompt service,” KG Krishnamoorthy Rao, Future Generali India’s managing director and chief operating officer, had earlier told Moneylife.