ONGC has told the Ministry of Petroleum & Natural Gas that it wants to buy 5 per cent stake in Indian Oil Corporation at six months’ average trading price and not on the Government approved price based on current market valuations.
This is because IOC shares have shot up more than 14 per cent since the Government decided that ONGC and Oil India would pick up 5 per cent stake in the refiner and oil marketing company through block deals. The IOC stock closed at ₹237.80, down 2.02 per cent, on the BSE on Wednesday.
On January 16, an empowered Group of Ministers decided to go by the block deal route instead of offer-for-sale (OFS) to garner more than ₹5,000 crore.
ONGC would have to shell out ₹500-600 crore more, taking the total investment to about ₹3,000 crore, to buy 5 per cent stake following the rise in IOC’s share price, sources told Business Line .
According to reports, a similar view has been taken by the board of Oil India Ltd, which too is picking up 5 per cent stake in IOC.