Journal Press India^®

Author Details ( * ) denotes Corresponding author

The Government of India pursued disinvestment policy with a broad objective to bring efficiency and operational freedom and reduce its stake in the ownership in a phased manner. The policies for disinvestment were changed from time to time to achieve this goal. The purpose of this research is to look into the impact of disinvestment on the financial performance of twenty Central Public Sector Enterprises (CPSEs). Typical CPSEs are non-financial enterprises that operate in a variety of industries and are classified as Navratna, Miniratna, or Maharatna. The influence of disinvestment on key financial variables such as liquidity, operating efficiency, leverage, payout ratio, total size, value, and profitability of CPSEs is studied using the Wilcoxon sign rank test. The data for the analysis spans seven years and is split into two parts: three years prior to the disinvestment and three years following the disinvestment. The test's findings indicate that after disinvestment, the CPSEs' liquidity situation, dividend, value, and size all improved. Profitability, leverage, and operating efficiency of CPSEs, on the other hand, have not changed significantly. This study has policy implications for policymakers that want to create a favourable disinvestment policy for CPSEs.

Keywords

Disinvestment; CPSE’S; Wilcoxon sign rank test; Liquidity.

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