India's $8.8 billion stake sale target feasible: Govt

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The government will achieve its targeted Rs 400 billion (USD 8.8 billion) for stake sales in companies in the fiscal year that begins in April, a senior finance ministry official said on Monday.

"I think there is enough appetite for government equity offerings. We will try to bring at least one issue every month in FY11," said Sumit Bose, head of the finance ministry division in charge of sale of government equity in state-run firms.

Energy utility Sutlej Jal Vidyut Nigam Ltd, Engineers India Ltd, Steel Authority of India Ltd, coal giant Coal India Ltd and miner Hindustan Copper Ltd are some of the firms where the government will sell stakes.

The IPO of Sutlej will hit the market towards the end of April, while the equity offering in Engineers India is expected after June, Bose said.

The government has been selling holdings in companies to raise funds for social spending programmes for the poor and to help bridge a large fiscal deficit.

The government has raised about USD 5.3 billion from asset sales in the current fiscal year that ends on March 31, Bose said.

The stake sale proposal in Steel Authority, the country's largest domestic steel maker, will be sent to the cabinet towards the end of this month or in early April, he said.

The equity offering in Hindustan Copper may be in two tranches, with the government shedding 10% after June and a public offering of another 10% by the company later.

The sale in Coal India, the country's largest coal producer, is expected after August, Bose said.

He said the government was also trying to put in place tougher norms for merchant bankers who participate in the government stake sales programme.

"We are reviewing the eligibility criteria and we hope to finalise the new criteria by next month," he said.

The government will review the possibility of stake sales in state oil marketing firms such as Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp in 2010/11.