India Plans to Borrow $9.5 Billion Pledging Assets - Bloomberg
India plans to borrow as much as 500 billion rupees ($9.5 billion) using land and shares as collateral in an effort to narrow a budget deficit, two government officials with direct knowledge of the matter said.
The South Asian nation will set up a fund manager by Jan. 15 that will pledge stocks it holds in non-state companies including ITC Ltd. (ITC), Axis Bank Ltd. (AXSB) and Larsen & Toubro Ltd. (LT), the officials said declining to be identified before a public announcement. The company will use the proceeds to buy the governmentís stakes in state-run firms, the officials said.
Finance Minister Pranab Mukherjee is exploring options to bridge a widening budget deficit after raising just 3 percent of a 400 billion rupee asset-sale target for the year ending March 31. The decision may help the government utilize assets the officials said are valued at 1 trillion rupees and narrow the gap thatís fanned inflation and driven the rupee to a record low.
ďThe government is doing this to raise funds as the market isnít conducive for asset sales, while they are hard pressed to meet deficit targets,Ē said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd.
India Plans to Borrow $9.5 Billion Pledging Assets to Fund Budget Deficit - Bloomberg