ONGC, OIL buy 10% govt stake in IOC

Both the companies bought 5% stake each at Rs 220 per share

State-owned ONGC and Oil India Ltd (OIL) have bought a 10% stake in Indian Oil Corp (IOC) from the government for Rs 5,340 crore.

Oil and Natural Gas Corp (ONGC) and OIL bought 5% stake each at Rs 220 per share, sources privy to the development said.

An Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram had on February 28 decided to sell the stake in IOC, the nation's largest oil firm, at a discount of 10% through an off-market deal.

Sources said the IOC scrip traded at about Rs 245 on that day and a 10% discount to that price was calculated to arrive at a selling price of Rs 220 a share. Also, Rs 220 is the three-month average trading price of IOC shares.

The sale of the 10% stake, or 24.27 crore shares, happened in an off-market transaction, with ONGC and OIL buying 5% each, they said.