India Plans to Sell Stake in Biggest Company by March

April 27 (Bloomberg) -- India may sell a stake in the nation’s biggest company as part of a plan to raise a record 400 billion rupees ($9 billion) from asset sales and use the proceeds to reduce the government’s budget deficit.

The government may sell shares in Indian Oil Corp. by March 31, Sidhartha Pradhan, joint secretary in the department of disinvestment, told reporters in Mumbai today. The company’s Chairman, B.M. Bansal, said he wasn’t aware of the government’s plan when called for comment. India also plans to sell shares in Hindustan Copper Ltd. and Power Grid Corp.

Prime Minister Manmohan Singh’s administration plans to sell shares in one state-run company almost every month. Asia’s largest economy after Japan and China is selling assets and airwaves to cut its budget deficit to 5.5 percent of gross domestic product in the year that started April 1 from 6.9 percent in the 12 months through March 31, the sharpest reduction in 19 years.

“We are very confident that we will be able to raise” the targeted amount, Pradhan said.

Indian Oil shares, which have declined 8 percent this year, gained 0.3 percent to 281.5 rupees at close of trading in Mumbai, giving the company a market value of $15.4 billion. The government owned 79 percent of the refiner as of Dec. 31, while state-owned explorer Oil & Natural Gas Corp. held 8.8 percent, according to data compiled by Bloomberg.

Highest Revenue

Indian Oil’s revenue was $53.6 billion rupees in the year ended March 31, the most by an Indian company.

The government may raise 12 billion rupees selling shares in Engineers India Ltd. in June, Pradhan said. Stakes will also be sold in Coal India Ltd. and Steel Authority of India Ltd.

India plans to raise as much as 130 billion rupees selling shares in Coal India in July, in the nation’s biggest initial public offering, two government officials with direct knowledge of the sale said on April 20.

“We think this will be the largest public issue to hit the Indian markets,” Pradhan said of the Coal India IPO.

The largest IPO in India’s markets to date was Reliance Power Ltd.’s share sale in January 2008, which raised 115.6 billion rupees, according to Bloomberg data.

SJVN Ltd., a state-owned Indian power utility, plans to offer shares for 23 rupees to 26 rupees each in a sale that opens on April 29, according to a release from the company.

The government is auctioning spectrum for operating 3G services in India’s 22 designated telephone zones. The plan to sell 93 licenses to provide high-speed data to mobile phones and computers may raise an estimated 500 billion rupees.