JAYACHITRA, S (2015) IMPACT OF DISINVESTMENT ON LISTING AND NON-LISTING CPSES AT BSE. EXCEL International Journal of Multidisciplinary Management Studies, 5 (6). pp. 68-84. ISSN 2249- 8834

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Abstract

The main objective of disinvestment policy in India is to promote people‟s ownership of
Central Public Sector Enterprises to share in their prosperity through disinvestment. The
disinvestment process to facilitate unlocking the true value of the Central Public Sector
Enterprises for all stakeholders – Investors, Employees, Company and the Government and to
list all profitable Central Public Sector Enterprises on stock exchanges. Higher disclosure levels
due to listing to bring about greater transparency and accountability in the functioning of the
Central Public Sector Enterprises. The study compares the pre- and post disinvestment financial
and operating performance of the selected disinvested Central Public Sector Enterprises (CPSEs)
of Indian Manufacturing sector based on the listing status at BSE. The listing and non-listing of
CPSEs at Bombay Stock Exchange (BSE) plays an important role in performance improvement
after disinvestment. A sample of 12 firms is drawn from various cognate group viz., Fertilizer,
Heavy Engineering, Medium & Light Engineering, Petroleum (refinery & marketing) and
Transportation Equipment of Indian CPSEs. The period of analysis covers 5 years before and 5
years after disinvestment. To measure the significant change of disinvested CPSEs based on
listing status at Bombay Stock Exchange, the sample is split up into two subsamples; listed and
unlisted disinvested CPSEs which might lead to difference in the profitability, operating
efficiency, output, employment, solvency and stock indicators To test our predictions, the
technique of Megginson et al. (1994) was followed in order to determine post disinvestment
performance changes. The analysis is based on ratio analysis, mean, Wilcox on Signed-rank test
and proportion test based on Sign test are used as principal methods for testing significant
changes in variables. The Mann-Whitney Rank-Sum Test has been used for analyzing the
significant difference in variables between listed and unlisted sample. Hence, it is documented
that financial and operating performance of the disinvested CPSEs unlisted is higher compared to
listed disinvested CPSEs at BSE. Thus, there is a huge 'go to market' knowledge gap which
exists in several PSUs. What are the steps involved in getting listed, what processes need to be
followed, what approvals need to be taken, what disclosures need to be made, what has been the
history of disinvestments in India, etc.

Item Type: Article
Uncontrolled Keywords: Disinvestment; Listed; Unlisted; Profitability; Operating Efficiency; Output; Employment; Solvency; Stock Indicators.
Divisions: PSG College of Arts and Science > Department of Commerce
Depositing User: Mr Team Mosys
Date Deposited: 01 Aug 2022 09:25
Last Modified: 01 Aug 2022 09:25
URI: http://ir.psgcas.ac.in/id/eprint/1386

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