The government will raise at least 31 billion rupees ($582 million) selling shares in Oil India Ltd., the nation’s second-biggest state explorer, helping shrink a budget deficit.
The offer to sell 60.1 million shares was oversubscribed more than two times, with investors bidding an average price of 517.99 rupees a share, compared with a minimum of 510 rupees, according to data on the National Stock Exchange’s website. The government, which owns more than 78 percent of Oil India, has yet to set the final price.
Finance Minister Palaniappan Chidambaram is seeking to raise 300 billion rupees by March 31, selling shares in state companies this year to narrow a fiscal deficit. Prior to today’s sale, the government raised 23 percent of its share-sale target for the year ending March 31, according to data compiled by Bloomberg. Sales are planned in companies such as electricity producer NTPC Ltd. and Steel Authority of India Ltd.
Oil India declined 2.7 percent to 525.50 rupees in Mumbai trading today. The shares have increased 13 percent this year, outperforming a 1.8 percent gain in the key Sensitive Index.
A panel led by Chakravarthy Rangarajan, chief of the prime minister’s Economic Advisory Council, last month recommended natural gas prices in India be linked to overseas rates. If the proposal is accepted, prices will double and help explorers including Oil India, Oil & Natural Gas Corp. and Reliance Industries Ltd.
The government raised 58.3 billion rupees selling a 10 percent stake in NMDC Ltd. last month, the third-biggest share sale in India in 2012, according to data compiled by Bloomberg.
Chidambaram plans to narrow the budget deficit to 5.3 percent of gross domestic product this financial year, compared with 5.8 percent last year. The government raised train fares and diesel prices this month to help reduce the shortfall.