ONGC stake sale on 1st March; may fetch about Rs 12,000 cr

ONGC stake sale on 1st March; may fetch about Rs 12,000 cr

Running against time to meet the Rs 40,000 crore disinvestment target by fiscal-end, the government on Tuesday decided to offload 5 per cent stake in the oil major ONGC through the auction route on 1st March that may fetch the exchequer about Rs 12,000 crore.

"The ONGC stake sale through the auction route (will take place) in couple of days. Notices will be send to stock exchanges tonight", Oil Minister Jaipal Reddy told reporters after the meeting of the Empowered Group of Ministers (EGoM) which was chaired by Finance Minister Pranab Mukherjee.
The day-long auction, according to sources, will take place on 1st March  and the floor price for the bids is likely to be around 5 to 7 per cent of the monthly average stock price.
The floor price, they added, would be handed over in a sealed envelope to the stock exchanges and would not be declared to the bidders.
The government owns 74.14 per cent stake in ONGC and proposes to offload 427.77 million shares or 5 per cent equity.
The sale, in which financial institutions are expected to participate, may fetch the hard-pressed government about Rs 12,000 crore.
The government in the budget for 2011-12 had envisaged to raise Rs 40,000 crore through PSU disinvestment, but in about 11 months it could mop up only Rs 1,145 crore from stake sale in the Power Finance Corporation (PFC).
The government had earlier postponed stake sale in several state-owned companies on account of poor market conditions.
The EGoM at its meeting earlier in the month also decided to postpone equity sale in the engineering major BHEL to the next fiscal.
The ONGC share closed 1.02 per cent, up at Rs 283.55 a piece on Bombay Stock Exchange (BSE).