India markets NTPC stake

OREANDA-NEWS. The Indian government is this week marketing a partial offering of state-controlled utility NTPC to investors in the US, UK and southeast Asia as it seeks to accelerate a stuttering disinvestment programme.

The 5pc stake sale in key thermal coal consumer NTPC is forecast to fetch the government around 52bn rupees (\\$800mn). The Indian state owns around 75pc of NTPC.

The government needs cash from selling shares in state-controlled companies to tame a widening fiscal deficit, but volatile global stock markets and weaker commodity prices have upset Delhi's plans.

Delhi is counting on energy companies for a major share of the disinvestment proceeds. It is seeking to raise Rs695bn from sales of stakes in state-controlled firms during the current 2015-16 fiscal year ending 30 March, more than double the estimated proceeds of Rs314bn in 2014-15.

But the government has managed to raise only Rs126bn in the first six months of 2015-16, or around 18pc of the targeted proceeds. The sale of 10pc of the Indian state's stake in domestic coal producer Coal India (CIL) has been delayed again after the government extended the date for submitting bids to 14 October. The sale of the CIL stake may fetch as much as Rs200bn based on previous valuations. The state owns 78.65pc of CIL.