PREVIEW-India's REC litmus test for govt stake-sale plan

jueves 18 de febrero de 2010 12:11 CET

* 203 rupee price at near 8 pct discount to Wed closing

* Analysts say price fair, expect long-term gains

* Investors to be allowed to revise bids lower

* Shares down 3 pct in weak Mumbai market

By Pratish Narayanan

MUMBAI, Feb 18 (Reuters) - A share sale in India's Rural Electrification Corp (RURL.BO: Cotización) to raise $754.4 million will be a litmus test for an ambitious plan by the government to offload stakes in 60 state-run firms over the next few years.

The sale, which opens on Friday, is set to draw a stronger response from investors than the sale in utility NTPC (NTPC.BO: Cotización) two weeks ago, after it was priced at a steeper discount.

The REC offer, the second major government issue this year, was priced at 203 rupees late on Wednesday, almost 8 percent below its closing price earlier in the day. The NTPC offer was priced at a 5 percent discount.

"After the NTPC case where there was a lot of hype but the price was costly, the government seems to have learnt from its mistakes," Sonam Udasi, vice president at BRICS Securities said.   Continuación...