India Woos PE Investors to Meet $11 Billion Asset Sale Target

(Bloomberg) -- India is asking private equity funds to invest in profit making state-controlled companies as Asia’s third biggest economy seeks to meet its asset sale target of 725 billion rupees ($11 billion) for next financial year.

The government is inviting buyout firms to “look into the opportunity of picking up strategic stakes in state assets, whether as a technology or enterprise partner directly, or in whatever form,” Neeraj Kumar Gupta, secretary, Department of Investment and Public Asset Management in India’s Finance Ministry told a Bloomberg private equity forum Friday in Mumbai.

Gupta oversees the divestment of state-run enterprises and is spearheading efforts to sell shares the government holds in companies including helicopter operator Pawan Hans and heavy-duty vehicle maker BEML Ltd. Prime Minister Narendra Modi’s administration has budgeted for a 35 percent increase in earnings from asset sales in the coming year as it aims to shrink Asia’s widest budget deficit to a decade-low.

The government will meet the current year’s 455 billion rupee target, Gupta said. India has met or beaten its disinvestment target only five times since 1998, data show.

The valuation process of big unlisted state-controlled companies, that are profit-making, is underway and the government will structure the sale of strategic stakes soon, Gupta said. PE funds have not bought a controlling share in any of the 16 strategic sales of state-run companies that the government has conducted since 1999, data available on the finance ministry’s website show.

--With assistance from Kartik Goyal

To contact the reporter on this story: Anto Antony in Mumbai at aantony1@bloomberg.net.

To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Candice Zachariahs, Arijit Ghosh