The country may sell a stake in the nation’s biggest company as part of a plan to raise a record Rs 40,000 crore ($9 billion) from asset sales and use the proceeds to reduce the government’s budget deficit.
The government may sell shares in Indian Oil Corporation (IOC) by March 31, Sidhartha Pradhan, joint secretary in the department of disinvestment, told reporters in Mumbai today.
IOC Chairman B M Bansal said he wasn’t aware of the government’s plan when called for comment. India also plans to sell shares in Hindustan Copper Ltd and Power Grid Corporation.
Prime Minister Manmohan Singh’s administration plans to sell shares in one state-run company almost every month. Asia’s largest economy after Japan and China is selling assets and airwaves to cut its budget deficit to 5.5 per cent of gross domestic product in the year that started April 1 from 6.9 per cent in the 12 months through March 31, the sharpest reduction in 19 years.
“We are very confident that we will be able to raise” the targeted amount, Pradhan said.
IOC shares, which have declined 8 per cent this year, gained 0.3 per cent to Rs 281.5 at close of trading in Mumbai, giving the company a market value of $15.4 billion. The government owns 79 per cent of the refiner as of December 31, while state-owned explorer Oil & Natural Gas Corporation held 8.8 per cent, according to data compiled by Bloomberg.
IOC’s revenue was Rs 5,360 crore in the year ended March 31, the most by an Indian company.
The government may raise Rs 1,200 crore selling shares in Engineers India Ltd in June, Pradhan said. Stakes will also be sold in Coal India Ltd and Steel Authority of India Ltd.