(Adds final data from stock exchange, analyst comment)
MUMBAI/NEW DELHI, June 13 (Reuters) - India kicked off its
plan to raise 400 billion rupees ($6.92 billion) through asset
sales this fiscal year with the sale of a stake in trading firm
MMTC Ltd, whose discounted share offering was
oversubscribed on Thursday.
The government plans to sell stakes in other companies such
as Coal India Ltd, Indian Oil Corp and Bharat
Heavy Electricals Ltd to cut its fiscal deficit, a top
priority for Finance Minister P. Chidambaram.
The successful sale of a 9.33 percent stake in MMTC, worth
about $96 million based on the minimum bid price, is another
shot in the arm for the government after ratings agency Fitch
signalled its approval of efforts to rein in the deficit.
The Indian government, which currently owns 99.3 percent of
MMTC, had offered 93.3 million shares for a minimum bid price of
60 rupees per share.
The single-day auction received bids for 108.4 million
shares at an indicative weighted average price of 60.86 rupees
The government was forced to set the minimum bid price at a
discount of over 71 percent because the stock is illiquid and
not easily tradable, a company source told Reuters.
Bhavesh Chauhan, an analyst with Mumbai-based Angel Broking,
had advised clients not to buy shares in the offering, saying
that lower iron ore exports and a possible drop in gold imports
into India would weigh on MMTC's revenue.
Shares of MMTC closed down 10 percent at 189.05 rupees,
while the broader market ended about 1 percent lower.
($1 = 57.7700 Indian rupees)
(Reporting by Krishna N Das and Prashant Mehra; Editing by
Supriya Kurane and Patrick Graham)