India aims to raise up to $2.4 bln selling stakes in state-run firms -official

IDBI Bank

02/02/2024 13:57

By Nikunj Ohri
       NEW DELHI, Feb 2 (Reuters) - India's government expects
to raise between 180 billion and 200 billion rupees ($2.2
billion to $2.4 billion) through the sale of stakes in state-run
firms in the fiscal year ending March 31, a top government
official told Reuters on Friday.
    Prime Minister Narendra Modi's administration moved from the
usual practise of setting a stake sale target in its budget
announced on Thursday. The government slashed the stake sale
target of 510 billion rupees for the current year, and said it
would now raise 300 billion rupees through both stake sales and
asset monetisation in the fiscal year through March 2024.
    Modi's ambition of privatising state-run firms has taken a
back seat due to impending elections, but his government has
delivered more stake sales than any previous administration.
    His government has not set a target for the next fiscal
year, ending in March 2025, in a break from usual practice.
    Tuhin Kanta Pandey, the top bureaucrat at the Department of
Investment and Public Asset Management said New Delhi would
receive another 120 billion rupees through asset monetisation in
the current fiscal year.
    But the government will not "aggressively" launch minority
stake sales just because state-run companies' shares are at new
highs, he said in an interview.
    Pandey said the government will continue to monitor Life
Insurance Corp of India's  LIFI.NS  (LIC) financial and share
price performance before pursuing any further share sale.    
        "LIC shares have just reached its initial public
offering  (IPO) price and we want retail investors, who
subscribed to the IPO, to gain," he said. 
    The insurer's share price has surged nearly 60% since
November, raising expectation of another minority stake sale.
    India has been unable to sell its Hindustan Zinc (HZL)
shares for the last two years as decisions taken by the
company's management have spooked both existing and potential
investors, Pandey said.
    HZL, in which the state owns a 29.54% stake, had decided to
demerge its businesses and that proposal is being currently
examined by the government, Pandey said.
    The process of privatising state-run companies like Shipping
Corp of India  SCI.NS  and BEML  BEML.NS  will continue, Pandey
said, adding the government plans to list SCI's demerged land
company in a month and that will pave the way for privatisation.
($1 = 82.8790 Indian rupees)

 (Reporting by Nikunj Ohri; Editing by Alexander Smith)
 ((nikunj.ohri@thomsonreuters.com; +91 90284 60730; Reuters
Messaging: twitter.com/nikunj_ohri))