New Delhi: Pursuing the policy of partial disinvestment in public sector undertakings, the Centre on 30 August decided to sell 10% fresh equity in profit-making Oil India Ltd through an IPO as well as sale of existing government holding to three state-run oil marketing firms.
The Cabinet Committee on Economic Affairs on 30 August approved a proposal for fresh equity issue of 10% of OIL’s paid up capital through an Initial Public Offer. It also approved issuing an additional 1% to the employees of OIL, Finance Minister P Chidambaram told reporters here.
In addition, it approved divestment of 10% of OIL’s paid up capital in favour of Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum. While IOC would be given half of this stake, HPCL and BPCL would be given the remaining shares in an equal ratio.
Chidambaram said the price band would be approved by an Empowered Group of Ministers on disinvestment already constituted by the government. The price of shares for IPO and oil marketing companies would be same, he said.
At present, the government holds 98.13% in the company, while the employees own the remainder.
“The divestment would not only strengthen their existing synergies but would also help them to raise resources by disposing these shares in the open market at an opportune time to tide over their under-recoveries,” he said.
Oil India follows other PSUs like Power Finance Corp and Power Grid Corp of India Ltd (PGCIL), which have seen partial divestment of the government’s stake. While PFC was listed on the bourses earlier this year, PGCIL will hit the market next month. The government also plans to sell 4.75% of its stake in another power PSU NTPC Ltd.