Centre preparing for Oil India disinvestment

Special Correspondent

The Disinvestment Ministry is gearing up for sale of government equity in Oil India Ltd. (OIL) following clearance from the Oil and Natural Gas Ministry.

“Correspondence was going on for the last six months...We got (the) Petroleum Ministry in-principle approval on Thursday for disinvestment in OIL,” said Disinvestment Secretary Mohammad Haleem Khan.

Stating that the details regarding the OIL disinvestment were being worked out, Mr. Khan said the total government shares in OIL that would be sold was yet to be decided. “The process of inter-ministerial consultation is on,” he said. The Centre owns 78.43 per cent in OIL.

In September, 2009, OIL's initial public offer (IPO) had helped the government garner over Rs.4,900 crore. As part of the IPO, the government offloaded its 10 per cent equity, while company issued 11 per cent fresh equity.

Mr. Khan also said the government had also identified GAIL (India) for sale of stake, but he did not mention if the OIL and GAIL issues would be done in the current fiscal.

The Centre has plans to raise Rs.40,000 crore through the sale of stake in public sector undertakings in the current fiscal, but it has so far been able to mop up only Rs.1,145 crore due to weak market conditions.

Mr. Khan further said the government would stick to the public offer route for stake sale in ONGC and BHEL, in which it plans to divest 5 per cent stake. While BHEL has prepared a Rs.4,000-crore follow-on public offer, the disinvestment of ONGC will help the government mop up about Rs.12,000 crore
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