The current market volatility may have prompted the government to defer disinvestment in rail infrastructure company RITES, but it has decided to offload its 10 per cent holding in upstream firm Oil India (OIL).
The Cabinet Committee on Economic Affairs (CCEA), had on January 10 approved RITES initial public offering (IPO) through fresh issue of one crore equity shares and a simultaneous divestment of government's 10 per cent shareholding.
However, the IPO has been deferred indefinitely because of current market conditions and a change in requirement of funds by RITES, official sources said.
Stock markets have seen a reversal of fortune on fears of major economies sliding into recession and a possible slower economic expansion in India.
The same methodology was to be adopted for OIL, where the company was to sell 10 per cent equity shares through an IPO, and the government would also offload its 10 per cent shareholding to refiners.
The CCEA had approved the proposal on August 30 and the IPO was slated to hit the market on November 10 but had been deferred briefly, sources said, adding that the public offering was well on the cards this fiscal.
The OIL was to launch its IPO of 2.64 crore equity shares on November 10, but the volatile market led the firm to re-think on the issue.
At present, government holds 98.13 per cent stake in OIL, which produces close to four million tons of crude oil a year.
