MUMBAI/NEW DELHI (Reuters) - India is aiming to sell a 10 percent stake valued at around $3.7 billion in top coal miner Coal India Ltd through a stock market auction, as part of the government's drive to raise money from reducing its holdings in companies.
The government, which owns 78.65 percent of Coal India, has sought bids from banks by Sept. 2 to manage the share offering, according to a notice issued by the Department of Disinvestment, which oversees stake sales in state companies.
Five banks will be selected for the offering, it said. The notice did not mention the timetable for the share sale. (bit.ly/1L5Dwat)
New Delhi is seeking to raise as much as $11 billion by selling stakes in state-run companies this fiscal year, crucial to narrowing the fiscal deficit to a planned 3.9 percent of gross domestic product in 2015/16.
The government has missed its divestment target for the last five years in a row.
Last month, the government raised about $260 million from the sale of a 5 percent stake in Power Finance Corp Ltd, after the auction received bids for more than twice the number of shares on offer.
The announcement on Coal India came amid growing investor concerns about the fate of Prime Minister Narendra Modi's reform agenda due to a political logjam in parliament.
Coal India, which the market values at about $36.5 billion,
on Wednesday reported a 6.6 percent fall in its June quarter net profit, missing analyst estimates.
Reporting by Devidutta Tripathy; Additional reporting by Aman Shah and Krishna N. Das; Editing by Sumeet Chatterjee and Mark Potter