Faced with strong opposition from the Petroleum Ministry over stake sale, the Empowered Group of Ministers (EGoM) headed by Finance Minister, P. Chidambaram on Thursday deferred a decision on disinvestment in state-run Indian Oil Corporation (IOC).
``The decision on disinvestment has been deferred,’’ Petroleum Minister Veerappa Moily told reporters after the EGoM meeting, without elaborating further on the issue. The EGoM is likely to hold another meeting next week.
Officials in the Petroleum Ministry said the Minister had raised concerns over pricing of IOC shares. The Finance Ministry is aiming to garner Rs. 4,500 crore by selling 10 per cent (19.16 crore shares) of the government stake in the oil major. At today's closing price of Rs. 198.95 on BSE, IOC has a market capitalisation of about Rs. 48,000 crore. This m-cap is after factoring in IOC's 7.69 per cent holding in Oil and Natural Gas Corporation (ONGC) worth Rs. 17,9711.78 crore leaving IOC with a market value of Rs 30,000 crore which is less than the investment that IOC is putting in setting up a 15 million tonne refinery at Paradip in Odisha.
On earlier occasions, Mr. Moily had stated that IOC cannot be sold when the scrip is way lower than the 52-week peak of Rs. 375 reached on January 18 last year. Investors at promotional road shows in the US, the UK and Singapore questioned the timing of the stake sale as there is no clear roadmap yet to address the lingering fuel subsidy issue.
