 "ONGC inches up on news of cancellation of disinvestment")
Shares of state-run ONGC are up over 1% to Rs 356 on the BSE on news that the disinvestment of 5 per cent stake in ONGC is unlikely this fiscal as the liquidity situation in the market is under stress after recent mega share sales while the subsidy issue remains unresolved.
The government on January 30 sold ten per cent stake in Coal India through an offer for sale and raised Rs 22,558 crore, close to one-third of which came from FIIs. While overseas investors put in about Rs 6,000 crore, retail investors pumped in close to Rs 2,000 crore in the issue.
This was followed by HDFC Bank offering on February 5. The leading private sector bank raised Rs 10,000 crore from a mix of American depository receipts (ADRs) and qualified institutional placement (QIP).
The government was supposed to sell 5 per cent of its stake in ONGC, the country's biggest oil and gas refiner, to raise Rs 17,000-18,000 crore. However, the double impact of tumbling global oil prices and the rising subsidy burden has left shares of ONGC battered.
The ONGC stock has also been impacted because of lingering subsidy burden. The company, as per the present formula, has to shell out USD 56 per barrel to help subsidise LPG and kerosene. However, with international oil prices slumping to less than USD 50 per barrel, its present net realisation is in the negative.
In March 2012, the government raised Rs 12,767 crore through auctioning of shares in oil major ONGC and state-run LIC had subscribed to a huge chunk of the issue.
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So far this fiscal, the government has raised about Rs 24,400 crore through stake sale in CIL and SAIL. The disinvestment department is racing against time to meet the budgeted target of Rs 43,425 crore in less than two months.
The stock opened at Rs 352 an touched a high of Rs 356 on the BSE. A total of 63,478 shares have changed hands on the BSE so far.