The Cabinet today cleared the proposal for sale of 10 per cent government stake in Indian Oil Corporation (IOC), which may fetch around Rs 3,750 crore to the exchequer at the current market price.
"IOC disinvestment proposal has been cleared by the CCEA (Cabinet Committee on Economic Affairs)," sources said.
The IOC scrip closed at Rs 195.75, down 4.84 per cent on the BSE. At the current market price, the sale of the 19.16 crore shares would fetch Rs 3,750 crore to the exchequer.
The government holds a 78.92 per cent stake in IOC.
The Disinvestment Department has already selected five merchant bankers -- Citibank, HSBC, UBS Securities, SBI Capital and J M Financial -- to manage the stake sale of the oil major.
IOC, the nation's largest refiner, has a market capitalisation of Rs 54,519 crore. It posted a net profit of Rs 5,005 crore in 2012-13, up from Rs 3,954 crore in the previous year.
The company's profit peaked at Rs 10,221 crore in 2009-10. IOC sells fuel at below-market prices, for which it is partially compensated by the government.
The government's disinvestment target through PSU stake sales in the current financial year is Rs 40,000 crore. So far, it has raised over Rs 929 crore through stake sale in MMTC, Hindustan Copper and National Fertiliser.
