IOC stake sale to ONGC, OIl at 10 percent discount

An Empowered Group of Ministers (EGoM) Friday approved 10 percent stake sale in Indian Oil (IOC) to ONGC and OIl at a discount of 10 percent, which will fetch around Rs.5,300 crore to the exchequer.

"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 the next few days," Petroleum Secretary Vivek Rae told media persons here after the EGoM meeting. "It will be an off-market deal," he added.

The deal, approved by the EGoM on disinvestment headed by Finance Minister P. Chidambaram, is expected to garner about Rs.5,300 crore for the exchequer. Petroleum Minister M. Veerappa Moily said the stake sale will be at a 10 percent discount on the market price. ONGC and OIl would buy five percent stake each. The 10 percent stake is the equivalent of 24.27 crore shares.

ONGC currently holds an 8.77 percent stake in IOC. The EGoM had last month cleared the IOC stake sale through a block deal following opposition to the offer for sale route from both the petroleum ministry and the country's largest oil marketer, on the grounds that the price of the scrip was low due to volatile market conditions. The government has a disinvestment target of Rs.40,000 crore for the current fiscal.