State-run Indian Oil Corporation (IOC) is likely to mop up about Rs 51 billion by selling its holdings in Oil and Natural Gas Corporation (ONGC) and Gas Authority of India Ltd (GAIL) in next couple of months.
"The Navaratna Board of IOC, on May 17, gave an in-principal approval for sale of 9.61 per cent equity shares in ONGC and 4.8 per cent in GAIL. We are yet to work out the method and details," highly placed company sources said. IOC is likely to net about Rs 51 billion from the sale of 13.7 crore shares of ONGC at current price of Rs 343.25 and 4.08 crore shares of GAIL at ruling price of Rs 75.1, sources said. "The modus operandi of the sale is yet to be worked out. We want to see how markets react before we appoint a merchant banker for the sale," sources said. IOC had in 1999 acquired 9.6 per cent government shareholding in ONGC for Rs 22.25 billion and 4.8 per cent government equity in GAIL for Rs 2.45 billion as part of cross-holding scheme formulated by the then finance secretary Vijay Kelkar. In return, ONGC picked up 10 per cent in IOC for around Rs 17 billion and 5 per cent in GAIL for Rs 2.45 billion. GAIL bought 2.5 per cent of ONGC's equity for around Rs 6 billion. "The decision would boost our bottomline and go a long way in sustaining profitability and bringing down the debt-equity ratio," sources added. Bureau Report