Friday Nov 15, 2024
Friday Nov 15, 2024
Friday, 23 January 2015 00:00 - - {{hitsCtrl.values.hits}}
NEW DELHI (Reuters): India invited bids from bankers on Wednesday to manage the sale of a 10% stake in iron ore miner NMDC, trying to revive a $ 10 billion asset sale programme and narrow the country’s fiscal deficit to a seven-year low. Barely two months before the end of the financial year, Prime Minister Narendra Modi is racing to raise even a fraction of the target, a centrepiece of his promise to trim the deficit to 4.1% of gross domestic product. To date, he has managed to garner a little more than $ 300 million from asset sales. The NMDC share sale could fetch $ 893 million at current market prices, ahead of the government’s first full-year budget on 28 February. The state owns an 80% stake in the mining company, shares of which were down 1.8% at Rs. 138.20 by Wednesday’s close. The stock had gained 2.1% last year, but is down 4.7% since the start of this year. The shares will be sold through an exchange-based bidding platform, the finance ministry said on Wednesday. Phani Sekhar, a fund manager at Angel Broking, criticised the decision, saying the government was ‘selling the family silver’. “I am disappointed with the divestment of NMDC,” Sekhar said. “It has so much cash that government should have instead taken a special dividend.” The move to sell shares in the company comes on the heels of a plan under consideration to sell a 10% stake in state-run refiner Indian Oil. Government sources had told Reuters that the federal cabinet was due to discuss that stake sale at a meeting on Wednesday. However, Telecoms Minister Ravi Shankar Prasad told reporters after the meeting that the matter was not discussed. The IOC stake is valued at $ 1.3 billion based on current prices. The shares gained 55% last year but dropped 2% on Wednesday to Rs. 330.05.
