Life Insurance Corporation (LIC) of India, the country’s largest investor, bought just under 86 per cent of shares sold by the government earlier this week in Indian Oil Corporation.
Advertisement
On a day when market melted, forcing the Bombay Stock Exchange benchmark Sensex down 1,624 points, investors pumped money into new stocks helping Indian Oil Corp’s 10-per cent stake sale get subscription of up to Rs11,107 crore, or 143 per cent of the offer, in one day.
LIC bought 20.87 crore shares of the 24.27 crore shares on offer at the OFS. With this disinvestment, the government of India shares in IOCL will come down to 58.57 per cent.
Having announced a move on Indian Oil on Friday, hoping to capitalise on strong refining margins, the Indian government had little choice but to press ahead with the sale of a 10 percent stake in the refiner and fuel retailer on Monday.
At 2 pm, the offer for sale of 10 per cent of IOC’s shares had only been subscribed to 0.65 times.
Advertisement
In the past, LIC has featured as the single biggest investor in many PSU auctions. The government’s collections from selling minority stakes in public sector companies now stand at almost Rs 13,000 crore. In January 2015, LIC acquired 45% in Coal India’s Rs 22,557-crore offering. In addition, the department of disinvestment (DoD) has also proposed to conduct a follow-on offer in CPSE ETFs to meet its record disinvestment target of Rs 69,500 crore.
