EGoM to meet on Wednesday to decide on OIL stake sale

EGoM to meet on Wednesday to decide on OIL stake sale New Delhi: The Empowered Group of Ministers, headed by Finance Minister P Chidambaram, is likely to meet tomorrow to decide on price and time of sale of government's 10 percent stake in Oil India Ltd (OIL).

The empowered group had also met last week to discuss the stake sale, but it ended inconclusive.

Sources said the EGoM is likely to take a decision on the base price for selling stake in OIL tomorrow as the Finance Ministry is keen on getting the share sale done in the current fiscal itself.

The Finance Ministry is considering to sell 10 percent stake or 6.01 crore shares in the petroleum exploring company through the Offer For Sale (OFS) route. OIL's paid-up capital, as on March 2012, was Rs 601 crore.

Shares of OIL closed at Rs 537.50 apiece, down 0.35 percent over previous close on the BSE. At the current prices, the stake sale could fetch over Rs 3,000 crore to exchequer.

Sources said the government is likely to fix the base price at 4-5 percent discount to the current market price.

The government holds 78.43 percent stake in the company and would come down to 68.43 percent, after disinvestment.

OIL issue would help the Centre inch towards the Rs 30,000 crore disinvestment target set in the Budget.

As per the disinvestment roadmap of the government, OIL issue was initally slated to happen in the last week of January, to be followed by one PSU stake sale every fortnight.

The stock has been on fire ever since the government started considering partial decontrol of heavily subsidised diesel prices. A partial deregulation would mean OIL having to pitch in lesser subsidy.

Upstream firms, like OIL and ONGC, make up for about 40 percent of the revenue that fuel retailers lose on selling diesel, domestic LPG and kerosene at government controlled rates.

The government had on January 17 allowed retailers to raise diesel prices by small quantum every month to cut the Rs 96,000 crore deficit on the fuel sale.

Sources said the international roadshows for OIL stake sale held in the US, UK and Middle East, to attract investors saw a very encouraging response.

OIL got listed on stock exchanges in the year 2009. As on March 31, 2012, the company has employee strength of 8,096.

PTI