The Telegraph
Thursday , January 31 , 2013
Since 1st March, 1999
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Oil India stake sale cleared

New Delhi, Jan. 30: The government expects to raise around Rs 3,000 crore by divesting a 10 per cent stake in Oil India on Friday.

“The stake sale proposal has been cleared. The divestment will take place on February 1 through the offer-for-sale (OFS) route. Roughly, we will raise Rs 2,500-3,000 crore,” petroleum secretary G.C. Chaturvedi said.

The OFS route is similar to selling shares on the bourses through auction.

“The price has been determined. It has been communicated to the stock exchanges,” oil minister Veerappa Moily told reporters after a meeting of the empowered group of ministers. Sources said the shares would be offered at a discounted price.

The Oil India stock today closed at Rs 527.15 on the BSE, down 2.30 per cent from its previous close. In intra-day trade, the scrip touched a high of Rs 543 and a low of Rs 521.20.

After divestment, the government’s stake in the company will come down to 68.43 per cent.

The Oil India stock has been on fire ever since the government began to weigh partial deregulation of diesel prices, which will translate into a lower subsidy burden on the company.

Upstream firms such as Oil India and ONGC compensate PSU oil retailers for about 40 per cent of the revenues they lose by selling diesel, domestic LPG and kerosene at government-controlled rates. Oil India got listed on the stock exchanges in 2009.

NTPC is likely to be the next in the divestment queue. The government will sell 9.50 per cent in the firm to mop up over Rs 12,000 crore.