The government’s decision to once again postpone the follow-on issue of its largest company, Oil and Natural Gas Corporation, will have a significant impact on the government’s disinvestment target of Rs 40,000 crore. It had earlier planned to come out with the issue last year but a more friendly stock market and good performance of Coal India helped the government to meet the similar target last year.
"The government has decided not to proceed for the time being with the further public offer of five per cent paid-up equity shares of ONGC through an offer for sale. The decision will be evaluated in due course. Significant work has been done by all involved with a common objective of delivering a successful offer and all continue to believe in the inherent strength of the company. The government remains committed to the disinvestment programme," the finance ministry said in a statement.
The government-controlled company said in a statement to the stock exchanges,“the selling shareholder (government) has decided not to proceed with the offer programme” and “shall evaluate its decision in relation to the offer in due course”.
The government plans to sell five per cent, or 427.77 million shares, through the offer. After the FPO, the government's stake will come down to 69.14 per cent from the current 74.14 per cent. The offer has been scheduled and deferred twice in this financial year.
