Indian Oil Corporation stock drops 18% due to upcoming share sale by government

MUMBAI: Indian Oil Corporation ( IOC) stock has dropped 18% in a month as concern over an upcoming share sale by the government has eclipsed optimism about the company’s strong earnings in the June quarter.

IOC’s first quarter profit rose 155% to Rs 6,435 crore from the same period a year ago, overtaking Reliance Industries as the most profitable company in India during the period. Analysts recommend avoiding IOC shares till the government announces the price at which it plans to sell the shares in the company. “I don’t think there is much left for retail investors to make money in the stock,” said Deven Choksey, MD, KR Choksey Securities.

“We expect IOC’s underperformance to BPCL and HPCL to narrow going forward. We have buy recommendation on the stock with a price target of Rs 455,” said Bhaskar Chakraborty, vice president at IIFL.