Feb. 11 (Bloomberg) -- India may raise 100 billion rupees ($2 billion) by selling stakes in Oil & Natural Gas Corp. and National Building Construction Corp. next month, a Finance Ministry official with direct knowledge of the matter said.
Prime Minister Manmohan Singh’s government plans to sell a 5 percent stake in Oil & Natural Gas, India’s biggest explorer, and 10 percent in National Building, the official said, declining to be identified before a public announcement.
Finance Minister Pranab Mukherjee plans to revive his asset sale program amid a stock market rally this year that has made the benchmark BSE India Sensitive Index the second-best performer in Asia. The government raised 11.44 billion rupees from share sales in the year that began on April 1, or 3 percent of its target, according to data provided by the Department of Disinvestment.
“A big ticket sale like ONGC next month will improve market sentiment,” said Vaibhav Sanghavi, director at Ambit Holdings Pvt. “In spite of the government’s best intentions, it remains to be seen how fast they work out the technicalities.”
The Sensex has risen 15 percent this year after posting its worst performance in three years in 2011 prompting the government to delay asset sales. ONGC rose 0.2 percent to 281.75 rupees in Mumbai.
The government scrapped an earlier plan to borrow as much as 500 billion rupees using land and shares, the official said. The South Asian nation had proposed setting up a fund manager to pledge stocks it holds in non-state companies, two officials, who declined to be identified, said in December.
“A group of ministers will take a decision on the timing and method of selling ONGC, NBCC stake,” Mohammad Haleem Khan, secretary, department of disinvestment said in a telephone interview yesterday. He declined to comment on the timing.
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