The government is gearing up to offload 5 per cent equity in the blue chip ONGC by December end in its bid to meet at least part of the ambitious disinvestment target of Rs 40,000 crore for the current fiscal.
Although half of the fiscal is over, the government has only raised Rs 1,144 crore from stake sale in Power Finance Corporation (PFC).
The 5 per cent stake sale in ONGC is estimated to fetch the government Rs 12,000 crore. After the follow on offer (FPO), its stake in ONGC will come down to 69.14 per cent from 74.14 per cent.
“All preparations have been completed and the (ONGC) issue is likely to be completed by the third quarter of 2011,” according to a status report prepared by the Department of Disinvestment in the Finance Ministry.
Volatile stock market conditions is forcing the government to delay stake sale in PSUs. Global equity markets have been on a downside on fears of a slow recovery in the Eurozone economies as well as the debt crisis in the US.
Further, the status report also said the public offer of Maharatna steel firm SAIL would hit the streets only when market conditions improves.
Through the share sale, the government plans to divest its 5 per cent stake in SAIL, while the company would issue fresh equity of the same proportion under the FPO.
“Timelines for opening the issue would be decided in due course based on improvement in market conditions and advice of lead managers. At current price it may not be advisable to go for the FPO now,” the status report said. PTI JD CS 10182006