MUMBAI, November 7, 2010 (AFP) – The success of India’s 3.4-billion-dollar sale of shares in state-run Coal India has raised hopes of big returns for the government from a cascade of looming partial privatisations, analysts say. The sale of a 10 percent stake in Coal India was oversubscribed 15 times and shares soared 40 percent on their opening day of trade last week as foreign and domestic investors scrambled to invest in the world’s biggest coal miner.
It was India’s biggest stock sale ever and “will see a positive rub-off on future disinvestments”, Sanjay Sharma, head of equities with Deutsche Bank, told AFP.
The Congress-led government is planning stakes sales in at least half a dozen state-owned firms in the coming months as part of a wide-ranging divestment strategy encompassing energy to steel companies.
The government aims to make the most of a booming share market which has soared 20 percent this year to hit record highs, boosted by inflows from foreigners escaping dismal returns and anaemic growth in the developed world.
Next out of the starting gates is state-owned energy transmission company Power Grid Corp of India which plans to launch an offer Tuesday to raise 80 billion rupees (1.8 billi