Share

India to sell 10 percent stake in state-run refinery

The government on Monday will put 10 per cent stake sale of Indian Oil Corporation through an offer for sale (OFS) that can fetch about Rs 9,500 crore to the exchequer.

Advertisement

The government now holds 68.57 percent shares in IOC. The floor price for the IOC stake sale would be announced on Saturday. The government intends to sell 242.79 million equity shares each of face value of Rs 10 each.

The government has an ambitious fiscal disinvestment target for this fiscal of Rs.41,000 crore through stake sale in public sector units, and another Rs.28,500 crore through strategic stake sale by transfer of management control. It comes at a time the markets are in a turmoil because of a deceleration in China-led global growth and rising tension in the Korean peninsula.

“This is a very good time to disinvest in IOC, and there is excellent appetite in the market”, Disinvestment Secretary Ms. Aradhana Johri told reporters at a press conference.

Indian Oil shares closed 0.7% lower at 394.85 rupees in Mumbai on Friday, compared with a 0.9% decline in the benchmark S&P BSE Sensex. The government has so far been able to collect only Rs 3,200 crore from stake sale of Power Finance Corporation, Rural Electrification Corporation and Dredging Corporation. The earlier three stake sales had raised just over Rs 3,000 crore.

If government achieves Rs 30,000 crore this year, it would still be the highest-ever disinvestment kitty in a year for the government.

The OFS will open at 0915 hours on Monday and shut on the identical day at 1530 hours. “10 each of the company (“Sale Shares”), aggregating to 10 per cent of the total paid up equity share capital of the company”, said the firm in a filing to the stock exchanges.

Five bankers dealing with the share shale – the most important thus far this fiscal – are CitiGroup, Deutsche Equities, Nomura, JM Financial and Kotak Securities.

Advertisement

Bankers have also been appointed for the sale of stakes in NTPC Ltd, Bharat Electronics Ltd, Engineers India Ltd, Nalco Ltd and Hindustan Copper Ltd. Additionally, it might sell 10 per cent in Coal India.

Govt to sell 10% stake in IOC to raise Rs 9,500 cr