New Delhi, Feb. 28: The government will sell its stake in Indian Oil Corporation (IOC) at a 10 per cent discount to the market price to ONGC and Oil India.
The selloff is expected to fetch Rs 5,300 crore.
“Yes, 10 per cent discount (to market price),” oil minister Veerappa Moily said after a meeting of the empowered group of ministers (EGoM) on disinvestment today. The panel, headed by finance minister P. Chidambaram, had met to finalise the price.
“We expect to raise around Rs 5,300 crore from the 10 per cent stake sale in IOC,” divestment secretary Ravi Mathur said.
The divestment will take place through an off-market transaction, with ONGC and Oil India buying 5 per cent stakes each.
“The two companies (ONGC and Oil India) will now work out the deal and the stake sale will happen very shortly. It should be happening in next few days. The government advises the board and the two boards will meet and decide. It will be an off-market deal,” oil secretary Vivek Rae said.
IOC shares have gained more than Rs 37 since January 16 when the stake sale was cleared by the ministerial panel at the current market price, plus/minus 1 per cent.
ONGC and Oil India had informed the petroleum ministry that they would buy a 5 per cent stake each in IOC at the six-month average traded price and not at the current rate. At present, ONGC holds an 8.77 per cent stake in Indian Oil.
Although the cabinet had originally cleared the stake sale in IOC through an offer for sale, the finance ministry had to go in for the block deal route after opposition from the oil ministry.
The ministry had argued that IOC shares should not be sold through an offer for sale as the current price did not reflect the right valuation of the company.
The Centre has clarified that consumers can buy more than one subsidised cooking gas cylinder a month.
After the cabinet’s decision to increase the annual cap to 12 subsidised LPG cylinders from nine, it was inferred that this meant one subsidised cylinder per month.
This led to protests as many households do require early refills.
Raising the cap will impose an additional financial burden of about Rs 3,801 crore per annum.