Privatisation remains the biggest theme in Indian markets over the next year

U.R. Bhat JF Asset Management

The government would also shortly announce details for the sale of Indian Petrochemicals Corp (IPCL), the country's second-largest petrochemicals firm, Mr Shourie said.

The two companies will be the first big-ticket privatisations in the current financial year.

Advisers would be appointed on Wednesday for the sale of National Aluminium Company but that the sale of Mahanagar Telephone Nigam (MTNL), was "not on the radar now", Mr Shourie said.

India plans to raise 120bn rupees (�1.67bn) from the sale of state assets in the current financial year ending March 2003.

Auto sales

Maruti, which holds about two-thirds of the new car market in India, is already 50% owned by Japan's Suzuki Motor.

Shourie will present his plan to cabinet shortly

The government intends to first allow Suzuki to up its interest to a majority stake through a 4bn rupee rights issue, which would be followed by a initial public offering.

"It will be good for Maruti, for the government, for Suzuki and for the privatisation process," said Mr Shourie, adding further details would be announced after cabinet approval.

More sell-offs

Shares of state-run firms, or public sector undertakings (PSU), have been the big gainers on the Indian stock market in 2002.

The Bombay Stock Exchange's PSU Index has leapt by 76.3% in 2002, compared with a 3.7% rise in the benchmark Bombay index.

"Privatisation remains the biggest theme in Indian markets over the next year," said U.R. Bhat, chief investment officer at JF Asset Management, with $500m invested in Indian assets.

The government has received three bids for IPCL, including one from state-run refiner Indian Oil and Reliance Industries, the biggest petrochemicals producer.

Over the coming months the government plans to sell stakes in two large, profitable oil refiners, Hindustan Petroleum and Bharat Petroleum.

Others on the privatisation list include the nation's biggest shipping line, Shipping Corporation of India, and Bharat Heavy Electricals, a power equipment maker.