New Delhi: The Indian government plans to sell 10% of its holding in Oil India Ltd, when the state-owned exploration firm launches an initial public offering of new shares, an oil ministry official said on 1 June.
“We had sent a cabinet note for 10% initial public offer, but the finance ministry has also recommended 10% disinvestment with the IPO,” the official, who did not wish to be identified, told Reuters.
He said a decision is yet to be taken about the sale and when to make the offering. Oil India, owned 98.13% by the government, has said it aims to invest Rs150 billion ($3.7 billion) over the next five years on exploration, including for acquisitions overseas along with refiner state-run Indian Oil Corp.
Employees hold the remaining 1.87% stake in Oil India. In March, Oil India Finance director TK Ananth Kumar said the company hoped an IPO would raise Rs15 billion, which it could use to fund expansion plans.
Cash from a divestment will go to the government to pay for spending on social projects such as schools, hospitals and schemes for the poor. India has budgeted to raise Rs16.51 billion through stake sales in state-run companies in the fiscal year ending in March 2008.