ITI likely to lead PSU divestment: report

The United Progressive Alliance (UPA) government that returned to power at the centre through the April-May general election will kick-off its pet divestment programme starting with state-run telecom equipment manufacturer Indian Telephone Industries Ltd (ITI), reports quoted a telecom ministry official as saying.

The government plans to sell either in part or whole three of ITI's six independent units, the reports quoted the communications ministry official as saying.

The government has invited expressions of interest from global telecom equipment manufacturers as also investors to buy out or take part stakes in three of the six manufacturing plants of ITI. The divestment process will then be extended to the other three plants will also be sold.

ITI manufactures a complete range of telecom products and was the first Indian company to manufacture BTS and other infra products for GSM / WiMAX and other new generation products.

According to a statement issued by the telecom ministry, the six units operated by ITI can be separated and given to investors for running as independent blocks. This can be in the form of a joint venture or buy-out of the unit.

Despite the government's high deficit levels of around 6 per cent of the country's gross domestic product, government officials have ruled out any big ticket divestments in the immediate future.

The stake sale would, however, will not have much impact on the loss-making company's fortunes as the sale proceeds are expected to go to the government.

Shares of ITI Ltd surged after news that the government has invited initial bids for sale of three of ITI's six units.