Govt to sell 10% stake in IOC to ONGC and OIL

NEW DELHI The government has decided to sell 10% of its stake in the country’s biggest refiner and fuel retailer, Indian Oil Corporation, to upstream oil companies ONGC and OIL in an off-market deal, petroleum minister M Veerappa Moily said on Friday. It also cleared the way for 5% stake sale in Bharat Heavy Electricals Limited ( BHEL) through a block deal to stateowned Life Insurance Corporation (LIC).

The IOC sale will be at a 10% discount to its market price, Moily said after a meeting of an empowered group of ministers (EGoM) headed by finance minister P Chidambaram.

The department of disinvestment, under the finance ministry, expects the IOC deal to fetch about Rs 5,300 crore. This will help the government meet its revised down disinvestment target of Rs 19,000 crore. The disinvestment in BHEL is expected to bring in about Rs 2,045 crore. “BHEL disinvestment will happen in this fiscal through block deal to LIC,” disinvestment secretary Ravi Mathur said.

IOC’s share slipped 0.26% to close atRs 247.35 on the National Stock Exchange on Friday. BHEL stock gained 3.76% to close at Rs 168.50. The government had initially budgetedRs 54,000 crore from disinvestment in state-run and private companies. ONGC and OIL will now buy 5% stake each in IOC over the next few days, petroleum secretary Vivek Rae said.