New Delhi, March 6: ONGC and Oil India will buy a 10 per cent stake of the government in Indian Oil Corporation (IOC) at Rs 220 per share next week.
The sale is expected to yield Rs 5,300 crore to the government.
An empowered group of ministers, headed by finance minister P. Chidambaram, had on February 28 decided to sell the stake in IOC at a discount of 10 per cent through an off-market deal.
Sources said the sale price was fixed on the basis of the price of the IOC scrip on February 28. The IOC scrip traded at around Rs 245 on that day, and a 10 per cent discount to that price worked out to be Rs 220 apiece. Also, Rs 220 is the three-month average trading price of the IOC scrip.
The divestment will take place through an off-market transaction, with ONGC and Oil India buying a 5 per cent stake each. The stake sale may take place on March 14 or 15.
ONGC holds 8.77 per cent in IOC.
Although the cabinet had initially cleared the stake sale in IOC through an offer for sale, the finance ministry had to go in for the block deal 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.
According to the interim budget of 2014-15, the receipts from divestment for 2013-14 have been revised downwards to Rs 16,027 crore from Rs 40,000 crore.
So far this fiscal, the government has raised about Rs 3,500 crore through stake sale in PSUs.
As far as the government’s residual stake sale in private companies is concerned, the interim budget has lowered the revised estimates to Rs 3,000 crore against the earlier projection of Rs 14,000 crore.
The government has set a target to raise Rs 36,925 crore from divestments in the next fiscal, while it aims to pick up Rs 15,000 crore from residual stake sales.