Ministers to meet again to finalise ONGC public issue

The panel of ministers would be meeting again within the next 10 days to finalise stake sale in bluechip company Oil and Natural Gas Corporation (ONGC) in the backdrop of the new guidelines by market regulator Sebi.

"We have discussed today the implications of the new Sebi guidelines. We are yet to take a decision in regard to mode and timing to be adopted [for divestment in ONGC]," Oil Minister S Jaipal Reddy told reporters after a meeting of Empowered Group of Ministers (EGoM) on disinvestment.

The EGoM, the officials said, will meet again in the 8-10 days to finalise the modalities for stake sale in ONGC.

The ministers, sources said, discussed the implications of the Institutional Placement Programme (IPP) guidelines issued by the market regulator Securities and Exchange Board of India (Sebi) earlier in the week.

As per the new IPP norms, promoters will be allowed to sell only up to 10% of their stake to maintain minimum public shareholding of 25% in private sector companies and 10% in case of PSUs.

The notification is expected to help the government, which is hard pressed for funds, to expedite disinvestment process by introducing the new private placement mechanism.

Reddy expressed the hope that government would be able to complete 5% stake sale in oil major ONGC in the current fiscal itself (ending March 31).

"We have not taken a view. We will meet once again when the deputy chairman of planning commission is available. We will then take a final call. Both the options are open [follow-on public offer and auction route]. It will be our attempt to do something in this fiscal," he said.

The government plans to sell 5%, or 427.77 million shares, either through the follow-on public offer (FPO) or IPP. After the dilution, its stake in ONGC will come down to 69.14% from 74.14%.

Disinvestment Secretary Mohammad Haleem Khan, who was present in the meeting, said the Cabinet approval will be sought, if required, for the IPP or auction route.

On the proposed disinvestment in BHEL, he added, the discussion on the matter was not taken up because "Heavy Industries Minister Praful Patel was not there".

Although the government had planned to raise Rs 40,000 crore from disinvestment in the current fiscal, it has not been able to make much headway because of uncertain market conditions. So far, it has raised only Rs 1,144 crore from stake sale in Power Finance Corporation (PFC).

Volatile stock market conditions is forcing the government to delay stake sale in PSUs. World equity markets have been on a downside on fears of debt crisis in Eurozone economies and global slowdown.