Cabinet nod for 5 percent stake sale in ONGC

The Cabinet Committee on Economic Affairs (CCEA) Wednesday approved the disinvestment of 5 percent paid-up equity in hydrocarbons producer ONGC out of the government's shareholding of 68.94 percent.

"This would further broad base the shareholding of the company and would enhance disinvestment receipts. After this disinvestment, the government of India's shareholding in the company would come down to 63.94 percent," a CCEA release said.

Presenting ONGC's annual report for 2013-14 last month, ONGC chairman D.K. Sarraf said that with the buoyancy in international crude prices and the strengthening of the company's US dollar-denominated revenues expected to continue, there is substantive near-term growth potential in earnings.

In 2013-14, ONGC registered its highest-ever revenue at Rs.842.01 billion, a growth of 1.1 percent from Rs.832.9 billion in the previous fiscal.

The company also posted a higher profit after tax of Rs.220.95 billion, up 5.6 percent from fiscal 2013, after sharing the highest ever under-recovery, or losses on selling below cost, of Rs.563.84 billion.

"With more remunerative pricing of our natural gas and with subsidy rationalisation, significant value remains to be unlocked for your trusted shareholdings," Sarraf said in the annual report.

The company has proposed a dividend payment of 190 percent with payout ratio of 43.04 percent.