Disinvestment:The Union Govt. likely to sell 10 % stake in IOC this fiscal Year

Highlights: 

  • Recently,the Department of Disinvestment (DoD) has circulated a draft note for the consideration of the Cabinet Committee on Economic Affairs (CCEA) for sale of 10 % out of government's 68.57 % stake in Indian Oil Corporation.
  • It sought comments on the proposal from Petroleum Ministry as well as Departments of Expenditure, Public Enterprises and Economic Affairs.
  • The plan to sell 24.27 crore equity shares in IOC was mooted after big-ticket disinvestment in Oil and Natural Gas Corp (ONGC) got stuck in subsidy woes.
  • Finance Minister Arun Jaitley had discussed possible disinvestment candidates in oil sector, other than ONGC, with Petroleum Minister Dharmendra Pradhan on January 8.
  • Government was to sell 5 % of its stake in the country’s biggest oil and gas producer ONGC to raise Rs 17,000-18,000 crore.
  • However, the double impact of tumbling global oil prices and the rising subsidy burden has left the ONGC stock battered. It has slipped from Rs. 472 in June last year to Rs. 343.85 (at close of market on Wednesday).
  • At current price, the government will get no more than Rs. 15,000 crore.
  • In 2014-15, the government has sold 5 % stake in steel major SAIL to garner Rs. 1,700 crore.
  • It is racing against time to meet its disinvestment target of Rs. 43,425 crore for this fiscal.
  • Blue-chip companies like ONGC, NHPC and Coal India had been lined up for disinvestment.