Govt considers selling 5% stake in ONGC: source

The deal that would be worth $2.9 billion at current market prices

The government will decide next month whether to sell a 5% stake in state-run Oil and Natural Gas Corp, a senior oil ministry official said, in a deal that would be worth $2.9 billion at current market prices.

 

If completed, the sale would raise nearly a third of the target for privatisation revenues announced last week in Prime Minister Narendra Modi's first budget, which seeks to curb the fiscal deficit and nurse the weak economy back to health.

 

"The department of divestment has floated a note seeking our comments for a 5% stake sale in ONGC," the official, who had direct knowledge of the matter, told Reuters on Tuesday. He added that a decision would be taken in August.

 

An official at the finance ministry, which houses the divestment department, said the government was interested in selling stakes in ONGC and other state companies given their high market valuations. He did not elaborate.