MUMBAI Nov 11 India has revived plans to sell
stakes in two state-owned companies to raise about $2.3 billion
to boost public finances, aiming to push through a sale by
mid-December to take advantage of a share market rally.
Two sources with direct knowledge of the matter said
investor roadshows will be launched in the United States on
Tuesday for a 10 percent stake in state refiner Indian Oil Corp
The government's Department of Disinvestment (DoD), which
oversees stake sales in state companies, has also completed most
of the overseas roadshows to sell a 5 percent stake in state
miner Coal India, which could fetch about $1.5
billion, the sources told Reuters.
The department hopes to launch the stake sales in the two
state companies before Dec. 15, they said, after which overseas
investors typically start to wind down for Christmas and New
"We would like to launch both before mid-December, but not
sure if we will be able to do that," one of the sources said.
The government's planned sale of stakes in Indian Oil and
other state companies including Coal India is critical to
relieving pressure on public finances that could put the
country's investment-grade credit rating at risk.
India has targeted raising $6.4 billion from selling stakes
in state companies in the fiscal year ending March 2014, but has
so far managed only $233 million, as ministries squabbled over
the timing of the issues and the rupee fell against the dollar.
IOC's share sale had been set for October, but planned
roadshows were cancelled after the oil ministry pulled out,
citing the weak share price and uncertainty over a new
The Coal India stake sale has been halved from 10 percent to
5 percent after union opposition.
"IOC (Indian Oil Corp) roadshows are starting from the 12th
(of November), even though it is a difficult issue to market
because of the sector problems," the source said, referring to
losses that state oil retailers incur because of selling diesel,
kerosene and cooking gas at state-capped rates.
The sources declined to be named due to the sensitivity of
the matter. DoD officials, as well as officials at Indian Oil
and Coal India could not be reached for comment.
Indian Oil, India's largest refiner and fuel retailer, on
Friday reported an 82 percent fall in net profit on account of
foreign exchange losses and lower compensation from the
government for losses on fuel sales..
India's oil ministry has forecast revenue losses of 803
billion rupees ($12.8 billion) for state fuel retailers IOC,
Bharat Petroleum and Hindustan Petroleum in
the second half of this fiscal year, up from 623 billion in the
The divestment department is keen to push through the stake
sales to take advantage of a share market rally that sent
India's benchmark stock index to a record high this
month on the back of strong foreign inflows. The index is up 6.4
percent this year.
The Indian Oil investor roadshows will be held in New York
and Boston. The Indian cabinet cleared the sale in August.
At current market prices, the 10 percent stake sale in
Indian Oil could fetch New Delhi around $800 million. The
government owns nearly 79 percent in Indian Oil, and 90 percent
in Coal India.
So far, officials have pitched the Coal India offering to
investors in the United States and Britain, and will proceed to
Australia and South East Asia this week, a third source said.
Roadshows for local investors will be held after that, he added.