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News updated at 6:15 PM IST

Govt eyes Rs 3k cr from 10% stake sale in Oil India

New Delhi:Jan 31, 2013,DH News Service 22:00 IST

Divestment to kick in on Friday

Hoping to cash in on the favourable market conditions, the government on Wednesday decided to offload 10 per cent of its stake in Oil India Limited, the upstream petroleum exploring company on February 1.

The government is expected to raise roughly Rs 2,500-3,000 crore from the sale that will bring it closer to its divestment target of Rs 30,000 crore this fiscal year. So far, the divestment of public sector companies has garnered Rs 6,900 crore.

"Proposal has been cleared. Disinvestment will take place on February 1 through OFS route. Roughly we will raise Rs 2,500-3,000 crore," Petroleum Secretary G C Chaturvedi said after a meeting of the Empowered Group of Ministers, headed by Finance Minister P Chidambaram.

OFS or direct offer is a public invitation by the issuing company itself. The offer can be made at a price that is fixed in advance or it can be by tender where investors state the price they are prepared to pay.

"The price has been determined. It has been communicated to stock exchanges," Petroleum Minister Veerappa Moily told reporters after the EGoM meeting.

The government currently holds 78.43 per cent stake in OIL. Analysts say, the recent rally in stocks may have encouraged the government to line up divestment starting with OIL in the second round.

The divestment department has also lined up NALCO (National Aluminium) and Steel Authority of India ( SAIL) for disinvestment in the current financial year, the stake sale in NTPC too is slated for the last week of February.

The Sensex has topped the 20,000 mark for the first time in two years, gaining a little over 2,800 points or 16.5 per cent since P Chidambaram became finance minister in August. A series of recent moves such as postponement of the General Anti-Avoidance Rules and loosening of the price control on diesel have helped improve the market sentiment.

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