By Manoj Kumar
NEW DELHI (Reuters) - India is likely to sell a 5 percent stake in both Power Finance Corporation Ltd (PFC) and Dredging Corporation of India Ltd as it races to narrow its fiscal gap to a targetted seven-year low by March, when the financial year ends.
"Five percent of the shares of PFC could be sold next week," a senior finance ministry official said on Friday, declining to be named as he was not authorised to speak to the media.
The PFC share sale could fetch 18.35 billion rupees ($298 million) at current market prices.
Prime Minister Narendra Modi aims to trim the fiscal deficit to 4.1 percent of gross domestic product this fiscal year and to that end it wants to raise $10 billion in asset sales .
However, finance ministry sources say it is only likely to get $4 billion to $5 billion from sales and so far it has raised a little more than $300 million.
"Current prices are attractive to own PFC, but the government could have waited for a higher price," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm based in Mumbai.
The state owns 72.8 percent of the financing company, whose shares were up 0.35 percent at 279.75 rupees at 0855 GMT.
The share price has fallen by more than 6 percent this year while the benchmark Sensex index has added 6 percent.
Apart from PFC and Dredging Corp, the government has invited bids from merchant bankers this week for 10 percent stakes in miner NMDC, Indian Oil Corp and National Aluminium Co.
It has also called for bids for a 5 percent share sale in engineering equipment maker BHEL.
If all these sales materialise, India could raise more than 200 billion rupees ($3.25 billion), based on current market valuation.
Next in line could be state-run manganese miner MOIL Ltd with a 10 percent stake sale, the finance ministry official said.
($1 = 61.4900 rupees)
(Additional reporting by Abhishek Vishnoi in MUMBAI; Editing by Malini Menon and Alan Raybould)
