The Indian government may raise 290 billion rupees ($6.27 billion) from share sales in two state-run companies, NMDC Ltd. and Steel Authority of India Ltd., Steel Minister Virbhadra Singh said Monday.

The share sale process is likely to be completed in the current fiscal year through March 2010, Mr. Singh said.

The federal government is looking at the possibility of small stake sales in some state-run companies to raise funds and bring down its fiscal deficit, which is expected to reach 6.8% of gross domestic product for this fiscal year.

Apart from SAIL and NMDC, the government is looking at selling stakes in NTPC Ltd., Manganese Ore India Ltd., Engineers India Ltd. and Rural Electrification Corp.

Mr. Singh said the government hopes to raise about 130 billion rupees from a share sale in iron ore miner NMDC, and 160 billion rupees by selling existing and fresh shares in SAIL.

The share sale proposals will need to be approved by the federal cabinet.

The steel ministry has already approved a proposal to reduce the government`s stake in NMDC to 90% from 98.38% currently, Mr. Singh said.

Retail investors and financial institutions own the remaining 1.62% of NMDC.

Mr. Singh said the ministry has approved also a two-phased follow-on public offering for SAIL to partly fund the steel maker`s expansion plans.

The government plans to sell a total of 10% of its holding while the company is expected to issue additional shares worth 10% of the expanded equity base, Mr. Singh said.

In the first phase, the government will sell 5% of its shareholding while SAIL will issue an additional 5% equity.

The stake sale and fresh share issue will bring down the government`s holding in SAIL to around 69% from 85.82% currently.