March 5 (Bloomberg) -- Hindustan Copper Ltd., India's largest miner of the ore, may receive final approval for a 20 percent stake sale in the next two weeks as part of the government's asset sell-off plan.
The proposal to offload 10 percent of state-run Hindustan Copper and the company's plan to sell a similar stake will be placed before Cabinet in "10 to 15 days," mines secretary Santha Sheela Nair said today in an interview in New Delhi. The share sale is expected to be completed within five months after approval, she said.
India's government plans to raise 400 billion rupees ($8.8 billion) in the next fiscal year selling stakes in government- controlled companies to plug the budget deficit. India has 60 state-run companies including Steel Authority of India Ltd. and Bharat Sanchar Nigam Ltd. in which it can sell stakes to build roads, ports and utilities.
"The sale will attract a lot of interest, although the current price is on the higher side," said Sanjay Makhija, head of institutional sales at Fortune Financial Services India Ltd. in Mumbai. "The government has an ambitious share sale plan and if the offer is not attractively priced, investors may wait for the next public offer."
Overseas investors accounted for only 4.1 percent of the bids by funds for NTPC Ltd., the nation's biggest power generator, in a sale that closed Feb. 5. The government had set a floor price of 201 rupees a share, compared with a price of 204.30 rupees at the end of trading that day.
In a stock sale, half of the shares offered are reserved for institutions, 35 percent for small investors and the remainder for all other buyers, according to government rules.
In the current financial year the government has also sold stakes in companies including Oil India Ltd., the country's second-biggest state-owned energy explorer and NHPC Ltd., India's biggest hydroelectric power producer.
"We would like the sale to happen as quickly as possible,' Nair said. "After the approval, Hindustan Copper will have to start the due diligence process, which should be done quickly as everyone is interested in completing the process."
Shares in Hindustan Copper, owned 99.59 percent by the government, fell 1.3 percent to 530 rupees at the end of trading in Mumbai. The benchmark Sensitive Index of the Bombay Stock Exchange rose 0.1 percent.