In an attempt to put the disinvestment process on fast track, the government on

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Wednesday allowed public sector enterprises to start appointing merchant ban-kers and other intermediaries even before Cabinet approves their public issues.

The move will immediately benefit companies like Engineers India, Steel Authority of India (SAIL) and PowerGrid Corporation of India (PGCIL), which have lined up public issues for the next six months. The move will also help the government’s Rs 40,000 crore divestment plan for the present financial year.

PGCIL chairman and managing director SK Cha-turvedi said that it was a welcome move as it will save at least 30 to 45 crucial days. “We were waiting for the Cabinet approval to come so that we can go ahead with the issue planning exercise,” he said.

The cabinet committee on economic affairs (CCEA) said companies would be able to start calling bids for appointment of merchant bankers and lead managers to the issue as soon as they receive approval from the minister in-charge.

“The appointment of merchant bankers and other intermediaries will now be taken up simultaneously with the process of seeking CCEA approval as soon as the minister in-charge has approved the case. It is expected that the time saved will be optimally utilised in preparing for the actual transaction and in facilitating the disinvestment process,” an official statement said.

Henceforth, the ministries concerned will be required to simultaneously seek approvals of CCEA for both disinvestments as well as empanelment of merchant bankers.

The approved process will help planning and timing of the public offerings in a manner that they are spread out evenly and avoid bunching as far as possible so as to ensure better response from the market, including retail investors, the statement said.

SAIL spokesman RK Singhal said the company welcomed the move as it would help ease the disinvestment process. Asked how soon the merchant bankers will be appointed, he said the process will be started immediately.

On the issue of SAIL not having adequate nominated members on its board for the disinvestment process to get into place, the spokesman said it was a natural process.

“Members retire and are replaced with other members. That is an official process and keeps taking place from time to time,” he pointed out.