PFC Share Sale Likely Next Week: Report

New Delhi: The government is likely to sell a 5 per cent stake in both Power Finance Corporation Ltd (PFC) and Dredging Corporation of India Ltd as it races to narrow its fiscal gap to a targeted seven-year low by March, when the financial year ends.

"Five percent of the shares of PFC could be sold next week," a senior finance ministry official said on Friday, declining to be named as he was not authorised to speak to the media.

The PFC share sale could fetch Rs 1,835 crore at current market prices.

Prime Minister Narendra Modi aims to trim the fiscal deficit to 4.1 per cent of gross domestic product this fiscal year and to that end it wants to raise $10 billion in asset sales.

"Current prices are attractive to own PFC, but the government could have waited for a higher price," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm based in Mumbai.

The government owns 72.8 per cent of the financing company.

Apart from PFC and Dredging Corp, the government has invited bids from merchant bankers this week for 10 per cent stakes in miner NMDC, Indian Oil Corp and National Aluminium.

It has also called for bids for a 5 per cent share sale in engineering equipment maker BHEL.

If all these sales materialise, the government could raise more than Rs 20,000 crore ($3.25 billion), based on current market valuation.

Next in line could be state-run manganese miner MOIL Ltd with a 10 per cent stake sale, the finance ministry official said.

Copyright: Thomson Reuters 2015