State IPO push lifts BSNL, Coal India listing hopes

By Pratish Narayanan

MUMBAI (Reuters) - Coal India and telecoms firm BSNL are the prime candidates to list on Indian bourses under the government's new rules for selling stakes in state firms, but valuations will have to be tempered to attract investors.

The government said last week unlisted state firms making profits in the past three consecutive years should list, as Asia's third-largest economy looks to fuel growth without further widening a large fiscal deficit.

The IPO windfall could raise more than $10 billion and prompt significant inflows of foreign investment.

Coal India, the country's biggest coal miner, and Bharat Sanchar Nigam Ltd, India's fourth-largest mobile operator and No.2 telecoms firm including fixed-line subscribers, are among firms meeting the new rules.

Coal India Chairman Partha Bhattacharyya told Reuters his company has been advised by the government to appoint an independent financial adviser for a potential IPO.

"We expect to make the appointment by December," he said.

BSNL Chairman Kuldeep Goyal said the government has to decide the timing for any potential IPO of his company.

This follows recent strongly subscribed IPOs of state-run firms NHPC and Oil India, which together raised $1.8 billion for the government.