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| Singh: the government of the new Indian prime minister has set itself modest targets for privatization proceeds in the year ahead and is likely to pursue the sale of minority stakes |
The new coalition government led by Indian prime minister Manmohan Singh will kick off privatization sales with a billion-dollar initial public offering in September.
On offer is 10.5% of the shares in National Thermal Power Corporation (NTPC), the sixth-largest producer of thermal power in the world. Half of the shares are owned by the government, according to sources at Kotak Bank, the lead arranger to the flotation. Sterlite, the owners of Balco, the aluminium company that was privatized a couple of years back, will buy the balance 44% stake from the government.
Other possible sales of residual stakes in privatized companies include Videsh Sanchar Nigam, sold to the Tatas; and Maruti, sold to Suzuki last year. NTPC's profit after tax was Rs49 billion ($1.06 billion) for the year to March and bids for its shares are likely to fetch between Rs30 and Rs60 a share.