Investors losing money as PACL divestmentprocess gets delayed

Vijay C Roy

Tribune News Service

Chandigarh, July 20

The delay in the disinvestment of Punjab Alkalies and Chemicals Ltd (PACL) by the Punjab Government is not only hurting the fate of the company but also the investors. According to statistics, the investors’ money eroded by 32% in the past five years, as the company’s shares failed to make the most of the rally.

The state government initiated the disinvestment process initially in 2002 but it is yet to dilute its equity despite repeated attempts. The government through Punjab State Industrial Development Corporation Ltd (PSIDC) holds 44.26% stake in the company while the public shareholding is 55.74%, including that of general public, mutual funds and financial institutions.

According to information, the stock price of the company on the Bombay Stock Exchange was Rs 23.15 on July 15, 2011. As the uncertainty over the disinvestment continues, the stock was trading at Rs 15.85 on July 15, 2016. The data suggests that investors’ money eroded by over 31% in the past five years. Also, in last year, investors lost around 24% of the amount invested in the company.

However, the stock witnessed a rally and touched Rs 48.70 on November 14, 2014, when there was a strong apprehension that the company will be disinvested as four players, namely Aditya Birla Chemicals (India) Pvt. Ltd, Nirma Ltd, Punjab-based Kudos Chemie Ltd and a consortium of M/s Al Shemail Garments & Perfumes Tr.LLC (lead member 90%) & Avenue Chemicals (P) Ltd were declared qualified. But none of the players submitted their bids, putting an end to speculations.

Again in 2005, due to the change of guard in Punjab, the disinvestment could not take place. The third attempt was made in 2010 when the state government received only one bid, but it was also not in order, so it was deferred. The fourth attempt was initiated in 2014, when none of the qualified bidders submitted their financial bids.

The company engaged in the manufacturing of caustic soda, reported a net loss of Rs 14.25 crore last fiscal as compared to Rs 12.93 crore it had reported in 2014-15. The net loss was Rs 9.58 crore in 2013-14.