Govt said to plan sale of 26% in BEML to meet deficit goal1 min read . Updated: 26 Oct 2016, 02:22 PM IST
Govt plans to sell a 26% stake in wagon maker BEML as well as auction holdings in a clutch of other companies to help meet a record asset-sale target
New Delhi: India plans to sell a 26% stake in wagon maker BEML Ltd. as well as auction holdings in a clutch of other companies to help meet a record asset-sale target, people familiar with matter said.
The plan, which will be sent for cabinet approval soon, includes the sale of three factories of Steel Authority of India Ltd. to a strategic partner, the people said, asking not to be identified as they aren’t authorized to speak with the media. The government’s also looking to sell an NMDC Ltd. steel plant as well as its entire stake in Scooters India Ltd.
Prime Minister Narendra Modi’s administration is seeking to narrow Asia’s widest budget deficit without cutting public spending that’s key to sustain India’s 7% plus growth rate. The shortfall reached 76.4% of the full-year target in the in the first five months of the fiscal year through August.
Other companies on the block include Hindustan News Print Ltd., Ferro Scrap Nigam Ltd., Pawan Hans Helicopters Ltd., Project & Development India Ltd., Bharat Pumps & Compressors Ltd., Central Electronics Ltd., Bridge and Roof Company India Ltd. and Hindustan Prefab Ltd., the people said. The proposal has been circulated to the various ministries for their comments. Finance Ministry spokesman D.S. Malik declined to comment.
The government aims to collect Rs56,500 crore ($8.5 billion) from sales of stakes in state companies in the year through 31 March. That includes Rs20,500 crore from majority stakes, even though previous attempts have been hindered by labour union protests and volatile financial markets.
About Rs36,000 crore is being sought from the sale of minority stakes in companies such as Coal India Ltd. and Oil & Natural Gas Corp., which seems ambitious considering India’s highest ever annual collection since 1992 has been Rs24,300 crore. That happened in a year when the benchmark stock index rallied 25%; equities have risen 2.6% over the past 12 months.
Shares of BEML rose 0.8% to Rs935.10 in Mumbai. Scooters India fell 2.9%, compared with a 0.3% drop in the benchmark S&P BSE Sensex. Bloomberg