Fri, February 2, 2024
A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad
By Nikunj Ohri
NEW DELHI (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 (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 and BEML 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)
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