Cross-holding sale comes up in Cabinet

The Cabinet Committee on Economic Affairs (CCEA) will discuss tomorrow a proposal to allow Indian Oil Corporation, Oil and Natural Gas Corporation and GAIL (India) Ltd to sell their cross-holdings.

Officials said the boards of IndianOil, ONGC and GAIL were likely to be authorised to sell shares in consultation with the government.

"The boards will have to consult the government to ensure that the stock market is not affected because of the sale," said an official.

Going by the prices at the close of trading today, these companies will be able to raise Rs 24,387 crore by selling their cross-holdings. IndianOil's 4.83 per cent stake in GAIL and 9.6 per cent in ONGC were worth Rs 14,627 crore at today's price.

ONGC's 4.83 per cent in GAIL and 9.11 per cent in IndianOil were worth 6,371 crore. GAIL's 2.4 per cent stake in ONGC will fetch Rs 3,389 crore.

The petroleum ministry, however, wants the matter deferred as Petroleum Minister Mani Shankar Aiyar will not be able to attend the CCEA meeting.

The CCEA will also review the foreign investment regime and consider raising the investment cap for power trading, certain mining sectors and airports. A proposal to do away with industrial licencing for potable alcohol is also being considered.

The Cabinet, which is also scheduled to meet tomorrow, will discuss Bills related to the Institute of Chartered Accountants of India, the Institute of Companies Secretaries of India and the Institute of Cost and Works Accountants of India.

The CCEA is also slated to discuss operationalising the National Urban Renewal Mission with an initial allocation of over Rs 12,000 crore for select cities.