New Delhi: Petroleum ministry has accorded in-principle approval for 5% stake sale in Oil and Natural Gas Corp. Ltd (ONGC) which may fetch the government about 18,000 crore to meet disinvestment target for the current fiscal.

“Ministry of petroleum and natural gas has agreed in-principle to the proposal of disinvestment of 5% government stake in ONGC," minister of state for finance Nirmala Sitharaman said in a written reply to the Rajya Sabha.

“ONGC, while supporting disinvestment of this equity held by government of India, has suggested resolution of a few issues, including fuel subsidy mechanism and gas pricing policy, to enable better price realisation from such disinvestment," she said.

As per the budget 2014-15, the disinvestment target is 58,425 crore including receipts from disinvestment of government stake in the non-government companies.

Meanwhile, the department of disinvestment (DoD) has kickstarted the process of stake sale in ONGC and invited bids for appointing merchant bankers to manage the share sale.

The merchant bankers would advise the government on the timing and the modalities of the offer for sale (OFS) and ensure best return to the government.

DoD will appoint up to five merchant bankers to manage the OFS.

Sitharaman said disinvestment of Coal India Ltd and ONGC will be subject to approval of CCEA.

The actual realisation from government equity sales in these companies would depend on market conditions and investors interest prevailing at the time of actual disinvestment, she added. The government is looking to sell 5% stake in Steel Authority of India Ltd (SAIL) and 10% each in Rashtriya Ispat Nigam Ltd (RINL) and Hindustan Aeronautics Ltd (HAL) in the current fiscal.

The disinvestment public offer in RINL is “tentatively scheduled for completion in the current fiscal year", she said.

Sitharaman further said that the Cabinet has already approved 10.82% stake sale in SAIL and an IPO of 10% of stake in each of RINL and HAL.

Further, the Cabinet has also approved sale of residual government equity in Hindustan Zinc and Balco.

In the budget, the government has estimated to collect 43,425 crore from selling stake in public sector undertakings and another 15,000 crore from sale of residual stake in the erstwhile government companies.