New Delhi: Volatile stock markets have not changed India’s plans to sell stakes in state-run companies, a senior finance ministry official told Reuters on Friday.
The government has pencilled in proceeds of roughly Rs40,000 crore ($8.6 billion) from sales in government companies in the fiscal year that began on 1 April.
“We are going ahead with all the preparations. And we don’t have any issue coming up till July,” disinvestment secretary Sumit Bose said in an interview.
Indian shares skidded to their lowest close in three-and-a-half months early this week, before paring losses, as Europe’s sovereign debt woes sparked worries of larger foreign fund outflows, casting doubts over the government’s ability to complete its stake sale plans.
Foreigners have withdrawn $2.3 billion from Indian equities so far in May in their biggest pullout since October 2008.
“Let’s cross that bridge, when it comes,” Bose said when asked whether market volatility would lead the government to defer its stake sale plans.
The government raised about $5.3 billion from asset sales in the fiscal year that ended on 31 March.
India plans to sell minority stakes in about 60 state companies over the next few years to help bridge its fiscal deficit and raise funds for social programmes for the poor.
Engineers India, Coal India, Steel Authority of India Ltd, Hindustan Copper, and Shipping Corp of India are among firms the government is preparing for stake sales.
Bose said Engineers India’s $270 million offer was likely to hit the market in July, followed by Coal India Ltd’s $2.7 billion IPO in September. Coal India is the world’s largest coal miner.
The union cabinet has also approved a 20% stake sale in state-run Steel Authority of India Ltd in two tranches. The timing of the share sales will be decided by the steel ministry, Bose said.
Bose also said New Delhi had not decided yet on stake sales in state oil marketing firms including Indian Oil Corp.
“First of all, Ministry of Petroleum has to take a call on that. It is too early to talk about it,” Bose said in his office.
In March, Bose had told Reuters that the government would review the possibility of stake sales in state oil marketing firms in 2010-11.
Media reports said state-run Indian Oil Corp would be one of the companies in which the government would look to sell a stake in the current fiscal year.
Bose said a share sale in Shipping Corp would also take place before end-2010, while the one in State Trading Corp could take place in 2011.