India sees stake sale target on track, Oil India in January
Selling equity in large public industries is a central plank of the government's plan to bring down a wide fiscal deficit, a major weakness in Asia's third-largest economy that has triggered repeated warnings of a credit downgrade from global ratings agencies.
Until last week the government's divestment plan was struggling, but it got a boost from a $1.1 billion offering of miner NMDC Ltd. It is on track to meet a budget target of $5.5 billion by the end of March, D. K. Mittal, Secretary, Financial Services and Disinvestment, told the news channel
Mittal said the Oil India offering will happen in January and will be quickly followed by NTPC by early February. Investor interest in stake sales was muted last year because of poor market conditions and high pricing, along with restrictions and poor incentives for banks handling the deals that put off foreign players.
The NMDC sale was popular in part because the government set the floor price below book value, which attracted more investors, which could set the tone for the upcoming stake sales.
"We have to have a strategy keeping in mind that the market tends to bring in the price at the lower level," Mittal said. "Pricing is only part of it, there are few more parameters which are
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