By Nidhi Verma and Promit Mukherjee
MUMBAI (Reuters) - The board of India's top explorer, Oil and Natural Gas Corp Ltd, will consider a proposal this week to list its overseas investment arm, ONGC Videsh Ltd, on domestic bourses, two sources privy to the matter said on Wednesday.
The move to float the unit - which has investments in 11 producing assets in countries including Russia, Brazil, United Arab Emirates, Sudan and Venezuela - is part of a government push to sell state assets to raise funds.
"ONGC has a board meeting on Dec. 20 and 21. A proposal for listing of ONGC Videsh will be discussed," one of the sources said.
Reuters in August reported that the government has asked ONGC to list ONGC Videsh.
"We have to take up the proposal after the government asked ONGC to consider listing ONGC Videsh," another source said.
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Both sources declined to be identified due to sensitivity of the issue.
No immediate response was available from ONGC.
One analyst said listing of ONGC Videsh will help in ascertaining the valuation of the company which does not report quarterly profit numbers.
"Once profit margins and operating profit numbers are known, and in-depth reporting of numbers are done, ONGC Videsh will obviously see higher valuations. Currently ONGC Videsh is given a value of 15 percent on ONGC's share price," said Gagan Dixit, senior analyst with Elara Capital.
He said listing of ONGC Videsh will also help ONGC raise funds to buy back shares and pay dividends.
The ONGC board will also consider a share buyback proposal on Wednesday.
Listing will also help ONGC Videsh to reach a valuation which has mostly alluded it because so far it is only valued based on its reserves, Dixit said.
He, however, said that the right time to list ONGC Videsh was when the crude price was close to $80 per barrel. On Wednesday, Brent crude oil was $56.56.
"But being a government company, backed by ONGC and overseas assets showing good promise, ONGC Videsh will definitely be able to raise money," he said.
ONGC Videsh has stakes in 41 oil and gas assets in 20 countries and in the last fiscal year produced oil equivalent to 26.2 percent of India's local output.
The company, fully owned by ONGC, produced 11 percent more oil at 9.35 million tonnes in the last fiscal year while its gas output increased by about 10 percent at 4.81 billion cubic metres.
ONGC Videsh holds reserves of 711.362 million tonnes of oil and oil equivalent gas as on April 1, 2018, according to the company website.
(Reporting by Nidhi Verma and Promit Mukherjee; Editing by Sanjeev Miglani and Christopher Cushing)