New Delhi: The western state of Gujarat, run by the main national opposition Bharatiya Janata Party (BJP), aims to raise about $648 million through an IPO of a state-run firm, a top official at the state government said.
The state’s government will sell 15% in Gujarat State Petroleum Corp (GSPC), mirroring the national Congress party-led coalition’s plans to offload shares in state-run firms as it it seeks funds for welfare programmes.
The sale will most likely take place during April-June, said D.J. Pandian, principal secretary for energy in the Gujarat state government.
A preferential allotment of 5% of GSPC at about Rs810 a share has been made to existing shareholders, including government-run State Bank of India, the country’s No. 1 lender, and state-run IDBI Bank, Pandian said.
The Gujarat government would hold 80%, he said.
The BJP is generally seen as more inclined to pro-market policies, and powerful industrialists such as Bharti Airtel’s Sunil Mittal and Reliance Communications’ Anil Ambani had pitched for Gujarat chief minister Narendra Modi to be India’s next leader before national elections last year.
Modi, a central figure in the Hindu-nationalist BJP, has built himself a reputation of fighting corruption to propel industrial expansion in Gujarat, but is accused of turning a blind eye to communal riots in the state in 2002 in which some 2,500 people, mostly Muslims, were killed.
The Congress party-led coalition in New Delhi, re-elected for a second 5-year term last July after comfortably overcoming the BJP, has sold shares in NHPC and Oil India for $1.8 billion as it seeks to drive Asia’s third-largest economy without widening a yawning fiscal deficit.
India aims to sell stakes in about 60 firms in the coming years and expects public offers for power utility NTPC, miner NMDC, Rural Electrification Corp and Satluj Jal Vidyut to be completed by end-March 2010.
The government is looking at big-ticket share sales including Steel Authority of India Ltd, Coal India Ltd and telecoms firm BSNL in the next fiscal year that starts on 1 April.