New Delhi: Listing of profitable subsidiaries of public sector units (PSUs) is "good" and will help in enhancing valuation, Minister for Heavy Industries and Public Enterprises Praful Patel has said.
"If the subsidiaries are making profits, listing is good. This will also help in reducing dependence (of the subsidiary) on the main company," Patel said.
Last week, the Department of Disinvestment (DoD) held inter-ministerial discussions on the possibility of listing profitable subsidiaries of central public sector enterprises (CPSEs) in the stock market. At present, the proposal is at an initial stage.
Besides helping raise resources for the PSUs, the listing of subsidiaries will also enable paying better dividends to the Centre. This will also help in promoting disinvestment by encouraging state-owned companies to buy back their equity from the government.
Besides, Patel said, it will enhance the valuation of PSU as sometimes the true value of subsidiaries is not reflected in the main balance sheet. The government proposes to raise Rs 30,000 crore in the current fiscal from disinvestment. During 2011-12, the government could  raised only about Rs 14,000 crore as against the target of Rs 40,000 crore.
Of the total 220 operational CPSEs, 158 units were profit-making as on March 2011.