India’s government made a push on Wednesday to bolster its strained finances, offering to sell a stake in miner Coal India and more mobile phone airwaves as it aimed to deliver on a promise to trim its fiscal deficit.

Prime Minister Narendra Modi is racing to honour a commitment to narrow the deficit to a seven-year low of 4.1 percent of gross domestic product in the year ending in March.

A revenue shortfall has driven up the deficit to 99 percent of the full-year target in the first eight months of the year, casting doubts on that pledge.

Modi’s eight-month-old administration said it would sell a stake of up to 10 percent in Coal India, of which the government currently owns close to 90 percent.

The stake to be sold, worth about $3.9 billion at current market prices, will be unloaded through an auction on Friday, it added.

Separately, the government will sell 2,100 MHz mobile phone airwaves at 37.05 billion rupees per MHz, Telecoms Minister Ravi Shankar Prasad told reporters after a cabinet meeting.

The sale is expected to fetch about an extra $3 billion from a telecoms spectrum band auction scheduled for early March.

New Delhi is aiming to raise $13 billion from the auction, a quarter of which is expected to flow into the exchequer by March 31.

Modi’s deficit promise relies heavily on the asset sale programme. He has budgeted to raise $10 billion selling small stakes in state-run firms.

But to date he has managed to raise a little more than $300 million.

The Coal India disposal would cover more than a third of the asset sales target.

The government is also banking on the sale of a 5 percent stake in energy explorer Oil and Natural Gas Corp, worth $2.5 billion. The sale is scheduled before the end of the financial year, the oil minister said on Wednesday.

Friday’s sale will include at least 315.8 million shares in Coal India, with an option to sell 315.8 million more, the statement said. A floor price for the auction will be set on Thursday.

Last week the government invited bids from banks to manage a sale of 10 percent stake in miner NMDC. It is also planning to sell 5 percent in Power Finance Corp (PFC), Dredging Corp of India and Bharat Heavy Electricals , among others.

Govt to sell 10% stake in Coal India on Jan 30; to get Rs 24,000 cr

(PTI) The government will sell up to 10 per cent stake in the blue chip Coal India Ltd (CIL) through offer for sale on Friday and is expected to mop up around Rs 24,000 crore at current market price.

“The (CIL share) sale shall…commence on January 30 and shall close on the same date at 3.30 pm,” CIL said a stock exchange filing. The offer will have 20 per cent reservation for retail investors.

The floor price for the stake sale would be announced tomorrow after the close of market hours.

Shares of CIL closed at Rs 384.05, up 0.27 per cent over previous close on the BSE.

As per a circular by the stock exchanges, government will sell 5 per cent stake or over 31.58 crore shares through an offer for sale (OFS) with an option to sell an additional 5 per cent stake.

At the current market price, the sale of up to 10 per cent stake or over 63.17 crore CIL shares would fetch over Rs 24,000 crore to the exchequer.

Coal India would be second company to hit the markets under the government’s disinvestment programme. In December, government sold 5 per cent stake in SAIL to garner over Rs 1,700 crore.

For the current fiscal, the government has budgeted to raise Rs 43,425 crore through disinvestment in PSUs.

Cabinet approves Rs 3,705 cr as base price for 3G auction

The Cabinet today approved a base price of Rs 3,705 crore per megahertz (MHz) for 3G spectrum auction, a move which would help the government garner over Rs 1 lakh crore along with sale of other mobile frequencies.

“Cabinet has approved a reserve price of Rs 3,705 crore per MHz for 2100 MHz band (which is used for 3G mobile services),” Telecom Minister Ravi Shankar Prasad told reporters here after the Cabinet meeting.

The reserve prices for other bands — 800 MHz, 900 Mhz and 1,800 MHz — have already been approved by the Cabinet for the auction, which is scheduled to start from March 4 along with the 3G spectrum band.

According to sources, the combined proceeds from auction of all the four bands are estimated by the government at over Rs 1,00,000 crore — making it the biggest ever spectrum sale.

The inter-ministerial panel Telecom Commission had suggested a base price of Rs 3,705 crore per MHz as 3G spectrum base price for the auction scheduled for March 4.

The base price suggested by the Commission is around 11 per cent higher than what telecom firms paid for in the 2010 auction. It is also 36 per cent higher than sectoral regulator TRAI’s recommendation of Rs 2,720 crore per Mhz.

The Cabinet in its meeting on January 5 had approved that 5 MHz in 2100 MHz band would be put up for sale in the upcoming auction but the pricing was not decided at that time.

The Defence Ministry has agreed to release 5 Mhz in 2100 Mhz band in 17 circles.

Last week, the Cabinet had approved swapping of 15 MHz of 3G spectrum between Defence and the Telecom Ministry. However, government will be able to provide it after completion of the harmonisation process.

The Telecom Ministry has proposed to exchange 15 Mhz spectrum it holds in 1900 Mhz band with same quantum of radiowaves held by Defence in 2100 Mhz.

The Cabinet has asked ministries involved in the process to complete harmonisation within a year.