State IPO push lifts BSNL, Coal India listing hopes

* Coal India to appoint IPO financial adviser by Dec

* Pricing crucial to attracting investors

* Govt could time IPOs during market upturn

* Listed state firms rise on stake sale hopes

* RITES, Cochin Shipyard, Manganese Ore other IPO candidates

By Pratish Narayanan

MUMBAI, Nov 9 (Reuters) - Coal India and telecoms firm BSNL are the prime candidates to list on Indian bourses under the government's new rules for selling stakes in state firms, but valuations will have to be tempered to attract investors.

The government said last week unlisted state firms making profits in the past three consecutive years should list, as Asia's third-largest economy looks to fuel growth without further widening a large fiscal deficit. [ID:nDEL13395] The IPO windfall could raise more than $10 billion and prompt significant inflows of foreign investment.

Coal India, the country's biggest coal miner, and Bharat Sanchar Nigam Ltd [BSNL.UL], India's fourth-largest mobile operator and No.2 telecoms firm including fixed-line subscribers, are among firms meeting the new rules.