India Cabinet Clears Stake Sales in 2 Companies - Wall Street Journal (India)

By RAJESH ROY And ANANT VIJAY KALA NEW DELHI—India's federal cabinet Thursday approved plans to sell stakes in two state-run companies as the government looks to boost its revenue and help the companies meet a listing requirement. The cabinet has approved stake sales of 5% in India Tourism Development Corp. and 1.02% in State Trading Corp. of India Ltd., Information and Broadcasting Minister Manish Tewari told reporters. He didn't say when these share sales will take place. New Delhi is under pressure to meet an Aug. 8 deadline set by markets regulator Securities and Exchange Board of India for listed state-run companies to raise their public ownership to at least 10%. The government currently owns 92.11% of ITDC, which runs hotels and restaurants and also provides other tourism-related services. In STC, which trades in farm commodities and metals internationally, it has a 91.02% stake. Last week, India sold a 4.01% stake in Hindustan Copper Ltd., raising about 2.60 billion rupees ($43.5 million). Government ownership in that company reduced to 90% after the sale. A finance ministry official, who didn't wish to be named, said the shares in ITDC and STC will be offered through an auction on stock exchanges, the route taken in the Hindustan Copper sale as well. The stake sales will also help the government step up its disinvestment plan under which it will sell stakes in several state-run companies to help narrow its fiscal deficit. India has budgeted disinvestment revenue of 400 billion rupees in the current fiscal year through March 2014. The government's fiscal deficit was equal to 4.9% of gross domestic product in the last fiscal year. It wants to reduce the gap to below 3% over the next few years to help facilitate economic growth. The wide deficit has pushed up market borrowing by the government in recent years, stoking inflation and reducing credit availability for private borrowers. Write to Rajesh Roy at rajesh.roy@dowjones.com and Anant Vijay Kala at anant.kala@dowjones.com via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHVykKenmYTDC3-zhPCtjU8GkYJ8A&url=http://online.wsj.com/article/SB10001424127887324879504578599171198668166.html

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