State-run refiners buy 10% in Oil India

State-run refiners buy 10% in Oil India

New Delhi: India’s state-run refiners, including Indian Oil Corp. Ltd , the nation’s biggest, will pay around Rs2,200 crore to buy a 10% stake in explorer Oil India Ltd from the federal government. The company concluded an initial public offering (IPO) last week.

Indian Oil bought 10.7 million shares at Rs1,050 each, T.K. Ananthkumar, Oil India’s director of finance, said by telephone on Tuesday. Bharat Petroleum Corp. Ltd, the nation’s second biggest state refiner, and Hindustan Petroleum Corp. Ltd each bought 5.35 million shares, he said.

Payment for the shares will be made on Tuesday, said Serangulam V. Narasimhan, Indian Oil’s director of finance. The refiner may pay around Rs1,100 crore for the purchase, he said.

Oil India raised Rs2,780 crore selling shares at Rs1,050 each in the IPO that closed on 10 September. It sold 10% of government-held stake to the public and 1% to employees.

Bharat Petroleum will pay Rs560 crore for a 2.5% stake in Oil India, S.K. Joshi, director of finance at the refiner, said by telephone from Mumbai. B. Mukherjee, director of finance at Hindustan Petroleum, declined to comment when reached by telephone in Mumbai.

Indian Oil gained 1.43% to Rs645.80 on the Bombay Stock Exchange against a 1.5% gain in the benchmark Sensex. Bharat Petroleum gained 0.45% and Hindustan Petroleum 2.33%. The three refiners were the biggest gainers on the BSE Oil and Gas Index.

India should aim to raise as much as Rs25,000 crore a year from asset sales to stimulate an economy growing at the slowest pace since 2003, the government said in the Economic Survey for the year ended 31 March. The government sold 5% of its holding in NHPC Ltd, India’s largest hydroelectric power producer, in August.