Loading...
See More

India to sell 10% oil stake to cut deficit

Jan 30 2013 15:41 AFP

File, AP)

Related Articles

India replaces China as Iran’s top oil buyer

India likely to hike diesel prices

India and Iran to meet over oil dispute

Iran, India oil row escalates

Iran, India resolve oil payment row

India’s top Iranian oil buyer to cut imports

 

New Delhi - India said on Wednesday it planned to sell a 10% stake in state-run refinery Oil India this week for at least $465m as part of plans to reduce its budget deficit.

The Congress-led government of Prime Minister Manmohan Singh urgently needs to raise capital from privatisation with the deficit threatening to exceed a targeted 5.3% of gross domestic product.

The government hopes to raise 25bn rupees to 30bn rupees ($465m-$561m) with its offer of 60 million shares from the Oil India sale set for Friday, said Oil Secretary G.C. Chaturvedi.

"The proposal has been cleared," the oil secretary told reporters.

The government was forced to jettison a few earlier sell-offs due to sluggish market conditions in a sharply slowing economy.

But it has re-energised its privatisation drive with India's market now trading at two-year highs on investor optimism about an economic upturn.

The government was expected to sell the shares of Oil India at a discount to the prevailing share price. The shares closed down 2.3% at 527.15 rupees on Wednesday.

The government holds a 78.43% stake in the company that would fall to 68.43% after the sale.

New Delhi has collected only 69bn rupees in its privatisation drive, raising fears it will be unable to attain its 300bn rupees goal for the current financial year to March 2013 and meet its deficit reduction target.

Cutting the deficit has become even more vital since global ratings agencies Standard & Poor's and Fitch reduced India's sovereign ratings outlook to "negative", jeopardising the country's investment-grade status.

The government has a string of sell-offs planned for the last two months of the fiscal year, including disposal of an 11% stake in iron and steel production giant Steel Authority of India.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

india  |  oil
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...