ONGC and Oil India may pick up equity in Indian Oil Corporation as part of the Government's disinvestment programme.
“The Government is looking at the option of ONGC and Oil India picking up 10 per cent stake in Indian Oil,” the Petroleum Secretary, Vivek Rae, told reporters on the sidelines of the Petrotech conference here.
The upstream companies, at a later stage, can sell that, he added.
This option is being considered at a time when the Petroleum Ministry has expressed reservation on offer for sale through stock exchange for divesting stake in Indian Oil. It feels that stock prices have almost halved in 5 years and any further offloading in the market will depress share prices. That is why an Empowered Group of Ministers deferred fixing of price and timing at its last meeting held on Tuesday.
Now, the meeting is expected to take place in a couple of days and the Petroleum Ministry will put forward its option. “The Finance Ministry has no issue on this option. They want Rs 4,600 crore irrespective of routes,” Rae mentioned.
There will be no lock-in period for shares, if transferred through the proposed route. It means that when investors want money for capital expenditure, they can sell the shares any time.
The Department of Disinvestment will have to go into whether this share sale method complies with SEBI guidelines, the Secretary said.
The Government has fixed a target of Rs 40,000 crore through disinvestment in Central Public Sector Undertakings. However, so far it has managed to get less than Rs 3,000 crore.