India is planning to sell small stakes in government firms, including the world’s biggest coal miner and Asia’s biggest zinc producer, to boost stock market gains and boost revenue in the final quarter of the fiscal year, according to people familiar with the matter. .
The government is looking to sell 5%-10% in Coal India Ltd, Hindustan Zinc Ltd, Rashtriya Chemicals and Fertilizers Ltd through the so-called offer-for-sale mechanism, the people said, asking not to be identified Details are not yet public. Altogether five firms, including one listed unit under the Ministry of Railways, could be selected, he said.
At current prices, a sale at the low end of the range could fetch the government about 165 billion rupees ($2 billion), according to Bloomberg calculations. Local stocks are at a record high, supported by a healthy pace of economic growth, and the cash raised will help Prime Minister Narendra Modi’s administration fund its subsidy bill that has risen partly because of the war in Ukraine.
India had budgeted 650 billion rupees from such asset sales in the year through March, but has so far raised just over a third of the target, mainly through Life Insurance Corp’s $2.7 billion initial public offering in May. From.
The roadshow has begun to gauge investor interest in the stake sale, the people said. Finance Ministry spokesperson could not be reached for comment.
Coal India jumped nearly 46% in the last year, while Rashtriya Chemicals rallied 58%, outperforming the benchmark S&P BSE Sensex’s nearly 6% gain.