New Delhi: The government has asked ONGC to list its overseas investment arm, ONGC Videsh Ltd, on the stock exchanges and transfer the proceeds to it in the form of a special dividend, helping to meet its divestment target, according to a letter by Dipam.

According to the letter that the department of investment and public asset management (Dipam) wrote to the ONGC management last week, the listing of ONGC Videsh Ltd (OVL) would help unlock value by improving its corporate governance and efficiency.

ONGC had helped the government to meet its divestment target last fiscal when it bought a 51.11 per cent stake in state-owned Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore.

After failing to find a buyer for Air India, Dipam is again looking at ONGC to meet the Rs 80,000-crore revenue mobilisation target set in the budget for 2018-19 from the sale of government stake in PSUs.

As on July 5, 2018, the government has realised Rs 9,219.91 crore as divestment proceeds against the budgetary target of Rs 80,000 crore, according to Dipam.

OVL, which is 100 per cent owned by ONGC, has so far invested Rs 1.5 lakh crore ($28.36 billion) in 41 projects it has across 20 countries.

In the letter, Dipam said PSUs with a positive net worth and no accumulated losses should be listed to unlock value. It, however, did not state how much stake in OVL should be sold for its listing.

Market regulator Sebi calls for a minimum 25 per cent public float for a listed company.

Officials said proceeds of the listing of OVL would accrue to its parent ONGC but the government would seek a special dividend .

The government owns 67.45 per cent in ONGC. If ONGC were to declare the entire proceeds of the OVL listing as a special dividend, the government would get 67.45 per cent of the amount. PTI

The government had in 2015 as well asked ONGC to list OVL. But the state-owned firm had at that time told the government that it was not the right time to list as oil prices were subdued and the company would not get the right value. Oil prices have since rebounded and the government is looking to cash in on that. Under its portfolio, OVL has reserves of 711 million tonnes of oil and oil equivalent natural gas. In 2017-18, it produced 9.35 million tonnes of crude oil, up from 8.43 million tonnes in the previous year. Together with natural gas, the output was 14.16 million tonnes of oil equivalent, up from 12.80 million tonnes in the previous year. It reported a net profit of Rs 981 crore on a turnover of Rs 10,418 crore in 2017-18 fiscal. This compared with a net profit of Rs 701 crore on a turnover of Rs 10,080 crore in the previous fiscal. It had reported a net loss of Rs 3,633 crore in 2015-16 due to a sharp drop in oil prices.