Govt to auction stakes in state-run companies

NEW DELHI (Reuters) - A government panel approved a plan to sell some of the government's shareholdings in state-run ONGC through an auction, but did not set a timeframe, Oil Minister S. Jaipal Reddy said on Wednesday.

Divestment Secretary Haleem Khan said separately that the government planned to sell holdings in other state-run companies including BHEL via auctions.

Khan also confirmed that the government would not be able to raise a budgeted 400 billion rupees through share sales in the current fiscal year ending March 31, but did not give a new target. Sales to date total only about $250 million.

The Securities & Exchange Board of India said last month that it would allow shareholders of the country's top 100 companies by market value to raise funds by auctioning their stakes through stock exchanges.

It set a minimum offer size of 1 percent of the company's paid-up capital worth at least 250 million rupees.

"An auction method that the Securities and Exchange board of India has put in its guidelines, now it is available to us for follow-on public offerings," Khan told reporters.

The panel of ministers that approved the sale of shares in ONGC and BHEL will meet again soon to discuss the timing and size of the divestment, Reddy separately told reporters.

Heavy Industries Minister Praful Patel, who also spoke to reporters, said the BHEL sale may happen in the fiscal year starting on April 1.

The government had planned to raise up to $2.5 billion through a public offering of shares but that plan was scrapped in October after tepid response from investors who were concerned about weak equity markets and the company's rising share of fuel subsidies.

Lower receipts from share sales and an economic slowdown have strained the government's finances.

Other state-run companies in which the government is looking to sell shares include Steel Authority of India Ltd , National Buildings Construction Corp Ltd and steelmaker Rashtriya Ispat Nigam Ltd.

(Reporting by Arup Roychoudhury; Editing by Ted Kerr)