)
An empowered group of ministers (EGoM) would be meeting on Thursday to decide on divesting 10 per cent government equity in Indian Oil Corporation (IOC) to two other state-owned companies.
A senior government official said the EGoM would consider options; one, sell seven per cent to Oil India Ltd and three per cent to Oil and Natural Gas Corporation. Alternatively, the two oil and gas producing companies pick up five per cent each in the country's largest petroleum retailing company.
With Indian Oil expected to make a revenue loss of Rs 74,700 crore this year on sale of diesel, LPG and kerosene, the government did not find enough interest among the investor community for the stake sale.
Despite phased diesel price decontrol and capping of subsidised LPG cylinders, government-controlled oil marketing companies have been unable to come out of revenue losses.
In order to meet the disinvestment target of Rs 40,000 crore for the current financial year, the finance ministry was planning to sell 10 per cent stake in IOC, which would have got them only Rs 4,500 crore. As the share prices were dipping to an all-time low, the petroleum ministry had raised its objections.
Earlier this month, the empowered group of ministers led by Finance Minister P Chidambaram had deferred a decision on the divestment of IOC.
This came after poor interest shown by investors during the overseas and domestic roadshows. According to ministry officials, the feedback from five merchant bankers — HSBC, UBS Securities, SBI Capital, J M Financial and Citibank — entrusted to handle the divestment process was also not positive forcing the government to resort to its public sector undertakings only.
On Wednesday, IOC shares closed at Rs 208.95 per share, taking its market cap to Rs 50,732 crore.
