India Said to Extend Deadline for Owners to Meet Holding By Anto Antony and Santanu Chakraborty - Apr 26, 2012

Indian companies may delay share sales worth about 400 billion rupees ($7.6 billion) after a government official said the regulator plans to extend a deadline for owners to trim their holdings amid a market slump. The benchmark Sensitive Index (SENSEX)’s 12 percent decline in the past year makes it difficult for companies to sell shares, according to the official, who declined to be identified citing rules. A new date has yet to be decided, the official said. Prime Minister Manmohan Singh’s government in June 2010 ordered founders of private companies to reduce their holding to at least 75 percent by June 2013, and state-run companies by August next year. The requirement would have prompted firms including Bharat Heavy Electricals Ltd. (BHEL), India’s biggest maker of power equipment, and Wipro Ltd. (WPRO), chaired by billionaire Azim Premji, to sell about 400 billion rupees of stock, U.K. Sinha, chairman of the market regulator said on April 13. “The intention is to help state-owned companies struggling to offload shares,” said R.K. Gupta, the New Delhi-based managing director of Taurus Asset Management Ltd., which oversees $1 billion of assets. “Companies planning to delist will get more time.” The extension may result in a drop in shares of companies including Novartis India Ltd., BASF India Ltd. and BOC India Ltd., which have risen on speculation the owners may take the company private to avoid having to reduce stake, said Kishor Ostwal, managing director of CNI Research Ltd. BASF has risen 30 percent, while BOC has surged 71 percent this year. An e-mail sent to the press office of the regulator, the Securities & Exchange Board of India, wasn’t answered. D S Malik, a spokesman for the finance ministry, declined to comment. The government raised 139 billion rupees selling stakes in state-owned companies in the year ended March 31, missing a 400- billion rupee target, amid a 25 percent decline in the Sensex in 2011. It plans to sell stakes in state-owned companies including Bharat Heavy, Hindustan Aeronautics Ltd., Steel Authority of India Ltd. (SAIL) and Hindustan Copper Ltd. (HCP) To contact the reporters on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net; Anto Antony in New Delhi at aantony1@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net ®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.