* Floor price for auction seen between 145 and 150 rupees
* Government likely to announce pricing details on Tuesday
(Adds details, context)
MUMBAI, Dec 10 (Reuters) - India has set a share sale in
state miner NMDC Ltd for Wednesday, the company said,
in a deal which sources said could add up to $1.1 billion to
government efforts to ease its yawning budget deficit.
The sale, part of the government's divestment programme to
raise $5.5 billion by next March, will be the biggest by a
state-run company since a $2.5 billion selldown in Oil and
Natural Gas Corp in March.
The government may on Tuesday announce a floor price for the
NMDC issue in a range of 145 rupees to 150 rupees a share, said
two sources with direct knowledge who asked not to be named as
details are not yet public.
The government, which owns 90 percent of NMDC, will sell a
10 percent stake, NMDC said in a notice to the stock exchanges.
At the top end, the sale will garner about $1.1 billion.
NMDC shares closed 2.3 percent lower at 154.75 rupees, ahead
of the decision. The stake sale would be carried out via an
auction to institutional investors, and will open on Wednesday
morning and close later in the day.
New Delhi has so far raised $148 million from the sale of
stakes in state companies in a process hit by volatile markets
and wrangling among government officials.
The government is likely to step up its divestment programme
in the months ahead amid concerns about its ballooning fiscal
deficit, which is seen at 5.6 percent of gross domestic product
in this fiscal year, above an official target of 5.3 percent.
The scale of the deficit will make it tougher for New Delhi
to avoid a credit rating downgrade.
Other state companies in which the government expects to
reduce its stake in the coming months include explorer Oil India
, power producer NTPC Ltd and National
Citigroup, Goldman Sachs, Bank of America
Merrill Lynch and Indian investment banks ICICI Securities and
Enam Securities are the bankers for the NMDC share offering.
($1=54.5 Indian rupees)
(Reporting by Prashant Mehra and Sumeet Chatterjee; Editing by
Tony Munroe and David Cowell)