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India's National Aluminium agrees to repurchase 25% stake from government

, or NALCO,has agreed to repurchase 25% of the shares out of the 80.93% interest the Indiangovernment owns at a price to be determined later this month, Reuters reported May2, citing India's Mines Secretary Balvinder Kumar.

The buybackis part of the government's driveto raise up to 565 billion Indian rupees to offset the national 2016-17 fiscal deficit,according to the report.

In November2015, the country's cabinet approveda proposal to divest a 10% stake in CoalIndia Ltd. to raise about 200 billion rupees.

Accordingto Reuters, if NALCO shares are priced at market rates, the 25% stake could be worthUS$450 million. NALCO shares closed at 46.35 rupees on May 2, which values the companyat about 119 billion rupees.

The state-controlledaluminum producer previously resisted the government's requests for a buyback dueto its expansion plans to diversify into the energy sector as well as US$2 billion smelter inIran, according to the report.

However,NALCO Chairman Tapan Kumar Chand told the newswire that the repurchase will notimpact the company's expansion projects. The company had 120 billion Indian rupeesuntil early 2016, with about half in cash, according to Reuters.

In earlyApril, NALCO its highest-ever bauxiteand alumina production in the 2015-16 fiscal year. It produced a total of 6,340,142tonnes of bauxite and 1,953,000 tonnes of alumina in the period, an increase of10.47% and 5.51%, respectively, compared to the prior fiscal year.

As of April 29, US$1 was equivalentto 66.37 Indian rupees.