<p>With Petroleum Ministry opposing disinvestment of IOC in the market, a ministerial panel is likely to meet next week to look at alternatives like selling its shares to other oil PSUs.<br /><br /></p>.<p>Oil Minister M Veerappa Moily said his ministry has "concerns" about Indian Oil Corp shares being sold at current trading rates and an Empowered Group of Ministers, headed by Finance Minister P Chidambaram, will look at alternatives to meet the disinvestment target.<br /><br />"We have an EGoM meeting next week to find a solution," Moily told PTI here.<br /><br />Refusing to discuss alternatives, the minister said he shared finance minister's concerns about meeting disinvestment target for the fiscal and alternatives should be looked at.<br /><br />Officials said the government is toying with the idea of offering government shares in IOC to other PSUs like gas utility GAIL India Ltd.<br /><br />The ministry, they said, is open to discussing such alternatives which will help meet the Rs 4,000 crore target the finance ministry is looking at from sale of IOC shares.<br /><br />The government had in the past too resorted to the so-called cross-holding route to shore up its revenues.<br /><br />In the late 1990s, the government sold its shares in Oil and Natural Gas Corporation (ONGC), GAIL and Indian Oil Corp (IOC) to raise Rs 4,643 crore.<br /><br />According to the so-called cross-holding plan, ONGC bought 9.11 per cent in IOC and 4.83 per cent in GAIL. IOC bought 9.61 per cent in ONGC and 4.83 per cent in GAIL. GAIL in turn bought 2.4 per cent in ONGC.<br /><br />In 2006, IOC sold 1.92 per cent, or a fifth of its holdings in ONGC for Rs 3,672 crore, recovering its entire initial investment and some more. It also sold half its holdings (2.41 per cent) in GAIL for Rs 561 crore.<br /><br />The EGoM had on January 9 deferred disinvestment of 10 per cent stake in IOC through an offer for sale on the stock markets owing to strong opposition from Moily.<br /><br />He said the IOC shares, which on Friday closed at Rs 200.35, were way below the intrinsic value. The Friday closing was way lower than the 52-week peak of Rs 375 reached on January 18 last year.<br /><br />At Friday's closing price, IOC has market capitalisation of Rs 48,644 crore. This m-cap is after factoring in IOC's 7.69 per cent holding in ONGC worth about Rs 18,000 crore.<br /><br />That leaves about Rs 30,000 crore market value that is attributable to IOC. This is less than the investment that IOC is putting in setting up a 15 million tonne refinery at Paradip in Odisha, according to the oil ministry.<br /><br />The Finance Ministry had planned to sell 19.16 crore IOC shares to meet a tenth of its Rs 40,000 crore disinvestment target for the current fiscal. The government holds 78.92 per cent stake in the country's largest oil refiner as on June 30.</p>
<p>With Petroleum Ministry opposing disinvestment of IOC in the market, a ministerial panel is likely to meet next week to look at alternatives like selling its shares to other oil PSUs.<br /><br /></p>.<p>Oil Minister M Veerappa Moily said his ministry has "concerns" about Indian Oil Corp shares being sold at current trading rates and an Empowered Group of Ministers, headed by Finance Minister P Chidambaram, will look at alternatives to meet the disinvestment target.<br /><br />"We have an EGoM meeting next week to find a solution," Moily told PTI here.<br /><br />Refusing to discuss alternatives, the minister said he shared finance minister's concerns about meeting disinvestment target for the fiscal and alternatives should be looked at.<br /><br />Officials said the government is toying with the idea of offering government shares in IOC to other PSUs like gas utility GAIL India Ltd.<br /><br />The ministry, they said, is open to discussing such alternatives which will help meet the Rs 4,000 crore target the finance ministry is looking at from sale of IOC shares.<br /><br />The government had in the past too resorted to the so-called cross-holding route to shore up its revenues.<br /><br />In the late 1990s, the government sold its shares in Oil and Natural Gas Corporation (ONGC), GAIL and Indian Oil Corp (IOC) to raise Rs 4,643 crore.<br /><br />According to the so-called cross-holding plan, ONGC bought 9.11 per cent in IOC and 4.83 per cent in GAIL. IOC bought 9.61 per cent in ONGC and 4.83 per cent in GAIL. GAIL in turn bought 2.4 per cent in ONGC.<br /><br />In 2006, IOC sold 1.92 per cent, or a fifth of its holdings in ONGC for Rs 3,672 crore, recovering its entire initial investment and some more. It also sold half its holdings (2.41 per cent) in GAIL for Rs 561 crore.<br /><br />The EGoM had on January 9 deferred disinvestment of 10 per cent stake in IOC through an offer for sale on the stock markets owing to strong opposition from Moily.<br /><br />He said the IOC shares, which on Friday closed at Rs 200.35, were way below the intrinsic value. The Friday closing was way lower than the 52-week peak of Rs 375 reached on January 18 last year.<br /><br />At Friday's closing price, IOC has market capitalisation of Rs 48,644 crore. This m-cap is after factoring in IOC's 7.69 per cent holding in ONGC worth about Rs 18,000 crore.<br /><br />That leaves about Rs 30,000 crore market value that is attributable to IOC. This is less than the investment that IOC is putting in setting up a 15 million tonne refinery at Paradip in Odisha, according to the oil ministry.<br /><br />The Finance Ministry had planned to sell 19.16 crore IOC shares to meet a tenth of its Rs 40,000 crore disinvestment target for the current fiscal. The government holds 78.92 per cent stake in the country's largest oil refiner as on June 30.</p>