Government okays Oil India's disinvestment, Rs 2,500 crore stake sale on Friday
Selling down its shareholding in cos is central to the govt's plan to cut its fiscal deficit to 5.3 percent of GDP in the current financial year.
By Agencies | Updated:
NEW DELHI: The government expects to raise more than Rs 2,500 crore ($465 million) by selling a 10 percent stake in Oil India Ltd on Friday, Oil Secretary G.C. Chaturvedi said on Wednesday.
"Proposal has been cleared. Disinvestment will take place on February 1 through OFS route. Roughly we will raise Rs 2,500-3,000 crore," Chaturvedi said.
According to sources, shares will be offered at a discounted price.
"Price has been determined. It has been communicated to stock exchanges," Petroleum Minister Veerappa Moily told reporters after the EGoM meeting.
The Government has proposed to sell 10 per cent stake or 6.01 crore shares in the petroleum exploring company OIL through offer for sale (OFS) route. OIL's paid-up capital as on March 2012, was Rs 601 crore.
Shares of OIL were trading at Rs 528 apiece, down 2.14 per cent from its previous close on BSE in later afternoon trade. At current prices, 10 stake can fetch around Rs 3,000 crore to the exchequer.
The government holds 78.43 per cent stake in the company and would come down to 68.43 per cent, after disinvestment.
OIL issue would help the Centre inch towards the Rs 30,000-crore disinvestment target set for the current fiscal. The government has so far raised Rs 6,900 crore through disinvestment.
As per the disinvestment roadmap of the government, OIL issue was initially slated to happen in the last week of January, to be followed by one PSU stake sale every fortnight.
The stock has been on fire ever since the government started considering partial decontrol of heavily subsidised diesel prices. A partial deregulation would mean OIL having to pitch in lesser subsidy.
The hefty fiscal deficit has triggered warnings of a potential credit rating downgrade.
"Proposal has been cleared. Disinvestment will take place on February 1 through OFS route. Roughly we will raise Rs 2,500-3,000 crore," Chaturvedi said.
According to sources, shares will be offered at a discounted price.
"Price has been determined. It has been communicated to stock exchanges," Petroleum Minister Veerappa Moily told reporters after the EGoM meeting.
The Government has proposed to sell 10 per cent stake or 6.01 crore shares in the petroleum exploring company OIL through offer for sale (OFS) route. OIL's paid-up capital as on March 2012, was Rs 601 crore.
Shares of OIL were trading at Rs 528 apiece, down 2.14 per cent from its previous close on BSE in later afternoon trade. At current prices, 10 stake can fetch around Rs 3,000 crore to the exchequer.
ADVERTISEMENT
The government holds 78.43 per cent stake in the company and would come down to 68.43 per cent, after disinvestment.
OIL issue would help the Centre inch towards the Rs 30,000-crore disinvestment target set for the current fiscal. The government has so far raised Rs 6,900 crore through disinvestment.
As per the disinvestment roadmap of the government, OIL issue was initially slated to happen in the last week of January, to be followed by one PSU stake sale every fortnight.
The stock has been on fire ever since the government started considering partial decontrol of heavily subsidised diesel prices. A partial deregulation would mean OIL having to pitch in lesser subsidy.
ADVERTISEMENT
Selling down its shareholding in companies is central to the government's plan to cut its fiscal deficit to 5.3 percent of GDP in the current financial year from 5.8 percent in 2011/12.The hefty fiscal deficit has triggered warnings of a potential credit rating downgrade.
ADVERTISEMENT
The Finance Minister is scheduled to present the Union Budget on February 28 wherein he is likely to announce the disinvestment target for the 2013-14 fiscal.Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
