India has asked at least eight state-run companies to consider share buy-backs in the fiscal year to March 2021, two government officials said, as New Delhi searches for ways to raise funds to rein in its fiscal deficit.
The firms asked include miner Coal India, power utility NTPC, minerals producer NMDC and Engineers India Ltd., said one of the sources, who sought anonymity as the discussions are private.
“Buy-back is an important tool in our strategy and it helps in building market price,” added the second official, who also spoke on condition of anonymity.
India is unlikely to be anywhere near its fiscal deficit target of 3.5% of GDP for 2020/21 as COVID-19 curbs hit tax collections and delayed efforts to privatise Bharat Petroleum Corp. and flag carrier Air India.
In February, the government had set itself a target of raising more than $27 billion from privatisations and sale of minority stakes in state-owned companies this fiscal.