ONGC disinvestment: EGoM to meet on Feb 24

The government is likely to finalise timeline for auctioning of 5% of its stake in Oil and Natural Gas Corporation (ONGC) to institutional investors on February 24 with a view to garnering about Rs 12,000 crore by fiscal-end.

"The Empowered Group of Ministers (EGoM) is expected to meet on February 24 to chalk out roadmap for ONGC stake auction," sources said.

The EGoM is likely to decide on the timing of the issue as well as the base or reserve price for the auction, they added.

A 5% share sale in ONGC is likely to fetch the central exchequer around Rs 12,000 crore. Shares of ONGC today closed at Rs 291.70, up 3.70% on the BSE over previous close.

Last week the EGOM, headed by Finance Minister Pranab Mukherjee, had decided to auction government stake in ONGC.

The ONGC stake sale, however, would not help in meeting the ambitious target of Rs 40,000 crore during the fiscal ending March 31.

Stake sale in ONGC may fetch around Rs 12,000 crore and together with the Rs 1,145-crore proceeds from PFC disinvestment, the government could be able to raise over Rs 13,000 crore in the current fiscal. Besides, a likely initial public offer (IPO) of NBCC could also bring around Rs 250 crore to the exchequer.

Earlier this month, market regulator Sebi allowed promoters to sell up to 10% stake using the auction window of stock exchanges.

Disinvestment Secretary Mohammad Haleem Khan had said that for all those companies in which CCEA has already cleared disinvestment in FPO mode, there is no necessity for fresh approvals for stake sale through auction mode.

Poor receipts from disinvestment would further aggravate government finances and push the fiscal deficit above the budgeted level of 4.6% of GDP. Experts say the fiscal deficit could even escalate to 5.6% this fiscal, up from 4.7% last year.