ONGC, IOC keen on early divestment

Two state run oil firms ?ONGC and Indian Oil Corpo?ration - are keen to tap the market in this fiscaL after the Centre set the ball rolling on fuel price de?control. "The matter (IOC, ONGC disinvestment) will be considered in the course of the year?. Oil secretary S Sundareshan said on Tuesday.

However, disinvestment secretary Sumit Bose said no proposal has been finalized. The government has already lined up five state-run firms for disinvestment in the fiscal and will identify a few more companies, Mr. Bose said, adding? As and when we will get the Cabinet approval for other companies, it would be communicated'.
Apart from Engineers India (ElL), whose follow-on public offer (FPO) opened on Tuesday, Manganese Ore India, Steel Authority of India, Hindustan Copper, Coal India and Power Grid Corp are the other PSUs that form part of the Centre's sell off program me for 20 1 0-11.

The oil PSUs and the government have been keen on launching public offers for some time but the lack of clarity on oil pricing had clouded their valuations. The Centre's decision last month to decontrol petrol Prices and hike prices of diesel and kerosene will boost their prospects.

While the two firms want to tap the markets to raise funds for capital expansion, the finance ministry is looking to meet its Rs.40,000 crore target from disinvestment proceeds through some big ticket offers.  The government holds 74.14% stake in ONGC and 78.92% stake in. IOC. At the current market price of n,262 a share, a mere 5% divest?ment in ONGC could fetch the government about Rs. 12,000 crore.

Meanwhile, Mr Bose said the government expects to earn Rs 977 crore from the 10% disinvestment in EIL.

Source: The Economic Times, Delhi, 28 July, 2010
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