India revives plans of stake sales in two state-owned firms- sources
Two sources told Reuters that the government of India intended to raise an estimated USD 2.3 billion to boost its coffers through a share sale of state-owned companies. The stake sales were planned to be done in the middle of December so the state could reportedly capitalize on the rally in the share market.
Reuters reported that the sale of India's ownership stakes were necessary to boost the country's public finances. India needed the sale so that its investment grade credit rating would not be put at risk. The country had planned to gather USD 6.4 billion from selling shares in state firms by March next year. However, it has only raised USD 233 million so far. Reuters reported that the fall of Indian currency against the dollar and the disagreement among the ministries on the timing of the stake sales were among the reasons for the low turnout.
The people with direct knowledge of the matter said the government would be putting a 10% stake up for sale in Indian Oil Corp. It would conduct investor roadshows in the US to facilitate the sale. Meanwhile, the same sources also told Reuters that the roadshows abroad for a 5% stake sale for Coal India, a state miner, were already finished. The deal could boost public finances by USD 1.5 billion, according to the sources.The share sale for Indian Oil Corp was originally scheduled for October but the oil ministry pulled out the roadshows after the share price weakened. There was also uncertainty about the fuel-subsidy formula, said Reuters.
The Department of Disinvestment is the government organization that oversees the stake sale of state firms in India. The DoD said it planned to launch the sale of the stakes in the two firms before December 15. However, one of the sources told Reuters, "We would like to launch both before mid-December, but not sure if we will be able to do that."