The government also wants to raise Rs 300 billion from the sales to help plug a yawning gap in the fiscal budget.
It raised just Rs 140 billion in the last fiscal year which ended in March, less than half of its Rs 400 billion target. The poor markets and investor sentiment are likely to make sales equally difficult this year, analysts and bankers say.
Apart from NMDC, the government plans to raise $622 million from the sale of a stake in capital goods-maker BHEL , $520 million from miner Hindustan Copper and $365 million from Steel Authority of India Ltd , the official said.
The divestment pipeline in the current fiscal year also includes a $158 million stake in Engineers India as well as shares in Oil India and Hindustan Aeronautics.
Last month state-owned steelmaker Rashtriya Ispat Nigam Ltd filed a draft prospectus for an initial public share offer for a 10 percent stake held by the government.
Proceeds from the stake sales will help the government to meet its deficit target of 5.1 per cent of gross domestic product for this fiscal year.
Indian companies raised $6 billion through equity deals in the first quarter of 2012, more than double the amount raised in the same period last year, Thomson Reuters data showed, but weak markets and volatile exchange rates have limited activity.
Copyright @Thomson Reuters 2012