India’s plan to sell 400 billion rupees ($9 billion) of stock next fiscal year is achievable even after the government missed its target this year, Kotak Mahindra Bank Ltd. Managing Director Uday Kotak said.
“The disinvestment target for next year will be met,” Kotak said in a Bloomberg UTV interview, after Finance Minister Pranab Mukherjee unveiled the goal in his annual budget speech. If the government wanted to meet this year’s target it could have pushed through sales of companies including Oil and Natural Gas Corp. and Steel Authority of India Ltd., said Kotak, whose Mumbai-based investment bank was the top arranger for state share sales in 2010, data compiled by Bloomberg show.
Mukherjee said the government will only raise half of the current fiscal year’s goal, also 400 billion rupees, as sales by Steel Authority, India’s largest producer, and Indian Oil Corp., the biggest refiner, were deferred. His plans to sell more shares come at a time when foreign investors are pulling out, sending India’s bourse down the most among Asia’s stock markets.
Shares of companies the government has said it plans to sell stakes in rose, led by Hindustan Copper Ltd., which was up 2.5 percent at the 3:30 p.m. close in Mumbai, and Oil and Natural Gas, which climbed 3.2 percent.
The government has appointed banks for the share sales of Indian Oil, Steel Authority and Power Finance Corp., a lender to Indian utilities.
The government will raise 221.4 billion rupees of its 400 billion rupee disinvestment target for the current financial year ending March 31, Mukherjee said today. “A higher than anticipated realization in non-tax revenues has led us to reschedule some of the divestment issues planned for the current year,” he told parliament.
Foreign institutions have sold a net $2.1 billion of Indian shares this year, compared with inflows of $29 billion last year. The benchmark Sensitive Index has fallen 13 percent in 2011, after outperforming the world’s 10 biggest equity markets last year, according to Bloomberg data.
Indian companies raised 45 billion rupees in share sales this year, less than a fifth of what they sold in the same period in 2010, Bloomberg data show. Citigroup Inc. ranked first in managing the sales this year, followed by Kotak Mahindra Capital Co., Deutsche Bank AG and HSBC Holdings Plc, the data show.
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