New Delhi: India is looking at reviving an up to 15% stake sale plan in state-run Shipping Corporation of India (SCI), a minister said on Wednesday, sending its shares up more than 7%.
The government had planned to sell the holding in the country’s largest shipping company in 2005, but the move was shelved on strong opposition from its then communist allies and the company’s employees.
Asset sale plans have been revived after the ruling coalition rode to power for a second five-year term in May, without the support of the communists. The government also needs money to lower its bloated fiscal deficit.
“We are examining it in the ministry. Now we have to go into the details of the subject,” shipping minister GK Vasan told reporters, when asked whether government would revive its earlier proposal of selling 15%.
He declined to give a time frame, saying: “ Ministry is waiting for the right economic climate.”
Finance minister Pranab Mukherjee is expected to outline a roadmap for selling stakes in the state companies in his budget on Monday.
Shares in Shipping Corp, valued at more than $1 billion, jumped 7.3% to Rs133.70, outperforming the broader market that gained 1%. The government owns more than 80% of the firm and the remainder is held by the public.
Shipping Corporation reported net profit of Rs9.4 billion ($196 million) for the year ended March on sales of 41.67 billion. The company, which owns 83 ships, is in the process of adding another 32, Vasan said.
“We have to improve the financial health of the Shipping Corporation this year. We have funds to do it,” he said, without elaborating.
Vasan also said the government was considering listing state-owned Cochin Shipyard through an initial public offer. The company had last year submitted a proposal to the government to be allowed for an IPO.
“All these things are on agenda in the ministry,” Vasan said.
The authorities have named National Hydroelectric Power Corp, Oil India Ltd, Coal India Ltd, telecom firm BSNL and national carrier Air India as candidates for divestments.