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  • Govt plans to divest stake in ONGC, IOC; may raise Rs 21k cr

    Published on August 7, 2010

    The government plans to sell 5 per cent of its stake in Oil and Natural Gas Corp (ONGC) and 10 per cent in Indian OilCorp (IOC) to raise about Rs 21,000 crore this fiscal, Oil Secretary S Sundareshan announced.

    “We have received a note from Department of Disinvestment that says they have approval of the Finance Ministry for divestment of government stake in ONGC and IOC,” he told in New Delhi.

    The proposal, he said, is for sale of 5 per cent or 10.6 crore equity shares in ONGC through a follow-on public offer (FPO) which at Friday’s trading price of Rs 1,233.25 would fetch the government Rs 13,189 crore.

    In IOC, DoD has proposed to sell 10  per cent of government equity through an FPO.

    “Simultaneously, IOC also proposes to sell 10 per cent of the expanded equity capital (through an FPO) to raise funds for its expansion plans,” he said.

    Post stake sale, the government’s shareholding in ONGC will come down to 69.14 per cent from 74.14 per cent currently.

    In IOC, the twin divestment and stake sale would reduce the government holding from 78.92 per cent to 64.57 per cent.

    “We are not preparing any Cabinet note. It is the Department of Disinvestment which will do that. We only have to seek approval (for the stake sale) from the (oil) minister (Murli Deora),” Sundareshan said.

    According to the road map being prepared, IOC would be the first to be disinvested. ONGC divestment will follow this.