* India asks Coal India, NTPC, NMDC, EIL to weigh share
* Asks for dividends to be paid if capital expenditure falls
* Capex target of 1.65 trln rupees set for fiscal 2020-21
NEW DELHI, Oct 19 (Reuters) - India has asked at least eight
state-run companies to consider share buybacks in the fiscal
year that runs through March 2021, two government officials
said, as New Delhi scours for ways of raising funds to rein in
its fiscal deficit.
The firms asked include miner Coal India, power
utility NTPC, minerals producer NMDC and
Engineers India Ltd, said one of the sources, who
sought anonymity as the discussions are private.
"Buyback is an important tool in our strategy and it helps
in building market price," added the second official, who also
spoke on condition of anonymity.
India is unlikely to be anywhere near its fiscal deficit
target of 3.5% of GDP for 2020/21 as coronavirus curbs hit tax
collections and delayed efforts to privatise energy firm Bharat
Petroleum Corp and flag carrier Air India.
In February, the government had set itself a target of
raising more than $27 billion from privatisations and sale of
minority stakes in state-owned companies this fiscal year.
However, some companies, particularly in the oil sector, may
not be able to do buybacks, the sources warned, as the
government's stake is just sufficient to ensure its position as
a majority holder.
"The government stake in these companies is about 51% and
there is a competing claim on their cash in the form of huge
capex commitment and dividend payments," the second source said.
But for those with sufficient funds and capital expenditure
below target for this fiscal year, the government could seek
approval from the cabinet to prune its stake to less than 51% in
individual firms without giving up control, the official said.
India had tasked 23 state-run companies with capital
expenditure of 1.65 trillion rupees ($22.5 billion) this fiscal
year, but some firms face spending challenges as the world's
second most populous nation adds virus infections.
The government had asked state-run firms to either meet
their targets for capital expenditure or "reward the shareholder
in the form of a dividend," the officials added.
($1=73.3540 Indian rupees)
(Interactive graphic tracking global spread of coronavirus:
(Reporting by Aftab Ahmed and Nidhi Verma; Editing by Clarence