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Government will tomorrow begin roadshows in US for sale of its 10% stake in nation's largest oil firm, Indian Oil Corp (IOC), that may fetch as much as Rs 3,900 crore.
Roadshows are planned in United States and London this week, sources with direct knowledge of the development said.
Officials from Ministry of Petroleum and Natural Gas and the Department of Disinvestment will hardshell IOC stake sale, which is crucial for meeting government's disinvestment target of Rs 40,000 crore.
The issue of 19.16 crore IOC shares is likely to hit the market sometime in December, they said.
IOC Chairman R S Butola had last week stated that the department of disinvestment (DoD) may be wanting to assess the market conditions at the roadshows and will take a view on the stake sale based on the response.
"They would like to assess the market conditions and response for themselves," he had said. "Government decision (on disinvestment) is still awaited."
IOC believes the government should not launch the stake sale now as the company share price is "unduly depressed".
IOC scrip closed at Rs 203.15 on the BSE, 46% below the 52-week peak of Rs 375 reached on January 18.
"We had given our inputs (on the disinvestment) in October... We believe prices are unduly depressed at this point of time," Butola had said.
The Department of Disinvestment (DoD), which is looking at mopping up Rs 40,000 crore from the sale of shares in public sector units this fiscal, has raised about Rs 1,325 crore so far.
The sale of 19.16 crore IOC shares at the current price would fetch the government about Rs 3,900 crore. Government holds 78.92% stake in the country's largest oil refiner as on June 30.
Originally, the roadshows were to be held from October 6 but were put off following opposition from IOC and the Oil Ministry which held that the country's crown jewels cannot be sold at low prices.
Oil Secretary Vivek Rae had on October 1 stated that his ministry favours calling off the roadshows and said "if the timing is not right for disinvestment, what is the point of having roadshows?
"They have their own target for disinvestment. We cannot at the same time sell an IOC share at Rs 200".
He had said: "You have to balance out the need for mobilising Rs 40,000 crore from disinvestment along with the fact that you cannot sell your crown jewels at low prices."
Citibank, HSBC and UBS Securities are among the five merchant bankers selected to manage the IOC share sale.
Butola in his inputs on the disinvestment had told the government that the timing was not right due to the "prevailing uncertain environment".
It was felt that a share sale under present conditions could fetch a low price and would further dent IOC's efforts to raise loans for crude oil imports.
