Ministry panel to discuss options for IOC share sale

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.

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."We have an EGoM meeting next week to find a solution," Moily said here.

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.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.

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.

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.

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.He said the IOC shares, which on Friday closed at Rs 200.35, were way below the intrinsic value.