India's government raised over $4 billion Friday by selling 10 percent of its stake in mining giant Coal India as it looks to raise funds through asset sales to keep its fiscal deficit in check, an official said. Investors bid for 675.24 million Coal India shares against more than 631 million shares on offer that were priced at a minimum of 358 rupees each, preliminary data from the Bombay Stock Exchange showed.
"Strong interest was expected. Sentiment about India has changed, and this government is market savvy. They also priced the share quite well and left little time for speculation," said Alok Churiwala of Churiwala Securities. New Delhi aims to raise nearly $10 billion from disinvestment during the current financial year which ends in March 31 to meet its fiscal deficit of 4.1 percent. "We have approximately raised 254.00 billion rupees ($4.1 billion). And this amount speaks volumes about the investment climate in India," Aradhana Johri, disinvestment secretary told business channel CNBC-TV18.
"So we are building a pipeline (of likely stake sales) so that we can move fast when market conditions are right," Johri added. The government went ahead with the stake sale despite opposition from some of the labour unions at the state controlled miner, who have already threatened to go on strike again, the Press Trust of India agency said Thursday.
Just a few weeks back, all Coal India workers went on strike on the same issue and relented only after government assured them there were no plans to privatise the firm that employs 3.4 million people. Analysts say fears of privatisation are exaggerated as the government's stake in Coal India is still nearly 80 percent. Prime Minister Narendra Modi and the right-wing Bharatiya Janata Party came to power last May, promising reforms to boost economic growth and improve business conditions.
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