The stake sale has doubled government's disinvestment proceeds for the current fiscal to Rs 10,434 crore.
In off-market transactions, Oil and Natural Gas Corp and OIL bought 5 per cent stake each at Rs 220 per share.
ONGC Chairman and Managing Director Dinesk K Sarraf confirmed his company's buying 12.135 crore government shares in IOC at Rs 220 per share. OIL head S K Srivastava said his firm paid Rs 2,670 crore for the 5 per cent shares in IOC.
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 per cent through an off-market deal.
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Sources said the IOC scrip traded at about Rs 245 on that day and a 10 per cent 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.
With the stake purchase, ONGC's holding in IOC has increased to 13.77 per cent from 8.77 per cent stake. OIL did not previously hold any shares in IOC.
After the disinvestment, government shareholding in IOC has come down to 68.92 per cent, from 78.92 per cent.
The government had so far raised about Rs 5,093.87 crore through stake sales in PSUs during current fiscal. It had lowered the revenue generation target from disinvestment to Rs 16,027 crore, from Rs 40,000 crore set at the beginning of the fiscal.
The EGoM then, on January 16, decided to sell the stake through block deal. Following this, IOC shares surged by more than Rs 42, following which ONGC and OIL, however, wrote to the Petroleum Ministry saying they would each buy a 5 per cent stake in IOC at the six-month average traded price and not at the current rate.