MUMBAI (Reuters) - The government is likely to scale back the size of the its planned auction of shares in National Aluminium Co Ltd (NALCO)
The government could also offer a hefty discount to the company's market price, because of the limited current float in the stock and the sluggish demand outlook for the metal, the sources said.
Earlier on Wednesday, a panel of ministers had approved selling a 12.15 percent stake in the aluminium producer through an auction on March 15.
The government, which holds 87.15 percent in the company, is likely to offer a 5 percent stake on Friday, with an option to sell 5 percent more, the sources said.
The shares are likely to be auctioned at a base price of 40 rupees each, a discount of about 13 percent to Wednesday's closing price of 46.10 rupees, they said. At that price, a 10 percent stake would be worth about $185 million.
In recent share auctions, the government had offered shares to investors at roughly 4 to 5 percent discounts.
Selling down its shareholdings in state companies is central to the government's plan to cut its fiscal deficit. It has raised about $4 billion through divestments so far this fiscal year and hopes to end the year close to its target of $5.1 billion.
(Reporting by Rajesh Kumar Singh and Sumeet Chatterjee; Writing by Prashant Mehra; Editing by Tony Munroe and David Holmes)
