India's government said it is confident it would meet its goal of raising Rs 145 billion in privatisation receipts by the end of the financial year next month despite market jitters over the flood of new share issues.
India's government has set a goal of raising around $3 billion from sales of holdings in six firms in under a month -- a blistering pace in a nation where state sell-offs have been known to drag on for years.
The government's haste is dictated by its desire to reach its privatisation target of Rs 145 billion ($3.2 billion) by the financial year's end on March 31. So far, it has raised just a small portion of that.
The Bombay BSE-30 share benchmark index slid 2.03 per cent on Wednesday to close at 5,618.15 with analysts saying liquidity was being sucked out of the market as investors made room in their portfolios for the new issues.
"The bids for issues like Indian Petrochemicals Corp, petroleum marketing company IBP and infotech company CMC are set to close over the next four to five days," said Vijay Tilakraj of KJMC Capital Markets in Bombay. "We will have to see the opening for these issues and the market impact."
Some analysts have cautioned the planned flood of issues could prove too much for the market to digest.
Earlier this week, India kicked off the roadshow for oil exploration giant Oil and Natural Gas Corp's share offer, the country's largest stock sale ever. The government is hoping to raise more than $2 billion from the sale of a 10 per cent stake in ONGC.
Including private companies, analysts say some $10 billion worth of issues could be in the pipeline for 2004 as firms race to the market, seeking to tap an equity boom in which Bombay's main index rocketed 73 per cent in 2003.
Unless there is a big dive in the market, analysts say companies are likely to go ahead with their offerings but issuers will be watching closely how the first batch of issues is digested.
- AFP
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