With less than four months available in the current financial year, the government faces an uphill task in achieving its FY16 stake sale target of Rs 41,000 crore.
So far this fiscal, the Centre has raised about Rs 13,000 crore and the equation translates to Rs 28,000 crore in the remaining 82 business days at spare. This further translates into raising Rs 341 crore each day.
Market experts said that weak sentiment given the nervousness surrounding a US interest rate, China’s economic growth, and the slow pace of economic reforms in the domestic market would impact the government’s ability to raise money. The government should conduct share sale in a phased manner, even as Coal India holds the key for the government, they said.
“It is the same story every year. With the markets on a weak footing, the government would be at a disadvantage by selling shares at a discount. The government needs to conduct share sale in a phased manner; otherwise, it will have to rely on one or two big investors,” said a top investment banker with a foreign investment bank.
The third tranche of 10% stake sale in Coal India could fetch Rs 21,500 crore at current rates. The Centre raised Rs 22,500 crore in January by selling 10% stake in the company.