Govt to divest 5% in ONGC, 10% in IOC

The government has initiated a proposal to sell five per cent of its stake in Oil and Natural Gas Corporation (ONGC) and 10 per cent in Indian Oil Corporation (IOC) to raise about Rs 20,000 crore during this financial year. “We have received a proposal for stake sale in these two companies from the Department of Disinvestment. The ministry is studying it and an approval will be taken from Petroleum Minister Murli Deora,” said S Sundareshan, petroleum secretary. The proposal, he said, was for sale of five per cent, or 10.6 crore equity shares, in ONGC through a follow-on public offer (FPO). This, at today’s closing price of Rs 1,231.70 per share, would fetch the government Rs 13,056 crore.

In IOC, the department has proposed to sell five per cent of the government equity through an FPO. “At the same time, IOC also proposes to sell 10 per cent of the expanded equity capital (through an FPO) to raise funds,” he said. While IOC’s sale of 10 per cent, or 242.7 million shares, at today’s closing price of Rs 366.85 would help the company to raise Rs 8,903 crore, the government’s sale of its 10 per cent stake, or 19 crore shares, would help it raise Rs 6,970 crore.