IOC to sell 50% stake in ONGC, GAIL

SHIMLA: The government is likely to give the go ahead soon to Indian Oil Corporation to sell half of its equity holding in two other oil PSUs Oil and Natural Gas Corporation and Gas Authority of India.
The proposal, aimed at mopping up around Rs 2600 crore, is awaiting a formal approval of the ministry, sources said.
When contacted, IOC Chairman M S Ramachandran told PTI that a secretary level meeting, held last week, had favoured the proposal.
"We plan to offload half of our 9.61 per cent stake in ONGC and 4.8 per cent in GAIL in the stock market shortly."
IOC, which had on May 17 approved sale of entire share- holding in ONGC and GAIL, would sell only 50 per cent of its stake as the exploration firm ONGC raised objections saying offloading large number of equity shares would lower its scrip price.
IOC is likely to net about Rs 2,645 crore from sale of 6.85 crore shares of ONGC at current price of Rs 365.55 and 2.04 crore shares of GAIL at ruling price of Rs 70.85.
"The modus operandi of the sale is yet to be worked out. We want to see how markets react before we appoint a merchant banker for the sale," Ramachandran said.
IOC, which had spent close to Rs 1800 crore on acquisition of IBP, has majority of its receivables tied-up in 7-year Government bonds and with refinery margins slipping, it is facing cash crunch.