- Cabinet approves share sale plan; timing, price not finalized
- Government stake in Coal India to drop to about 69% after sale
Prime Minister Narendra Modi is looking to raise about 200 billion rupees ($3 billion) by selling 10 percent of Coal India Ltd., a move that could earn his government a third of its asset-sale aim and help reach its budget deficit target.
The time and price would be decided by the finance ministry, coal minister Piyush Goyal told reporters in New Delhi on Wednesday. A sale before the fiscal year ends on March 31 would take total proceeds from divestment to about 50 percent of the government’s 695 billion rupee goal and lower its stake in the world’s biggest coal miner to about 69 percent.
Modi’s banking on asset sales to shrink Asia’s widest budget shortfall to an eight-year low. The gap was at about 70 percent of the full-year target in the first six months itself as tax collections are forecast to be lower than estimated and higher expenses loom.
The planned sale in Kolkata-based Coal India also indicates Modi’s resolve to counter labor unions, which argue that lower government ownership will hurt worker interests. The government expects the groups to support its plan, Goyal said.
The government, which holds about 79 percent in Coal India, had sold a 10 percent stake in January. It has also mopped up 127 billion rupees through share sales in companies including Indian Oil Corp. and Power Finance Corp. of India.
Coal India shares reversed losses of as much as 1.4 percent, rising 0.8 percent to 335.05 rupees in Mumbai on Wednesday. The stock has declined about 13 percent this year, outpacing the 7.3 percent drop in the benchmark S&P BSE Sensex.