October 21, 2014 2:05:26 am
The government is expected to sell 5 per cent stake in state-owned ONGC Ltd by early next month that will help raise an estimated Rs 18,000 crore.
“Given valuations, this is the right time to divest stake in ONGC,” said a senior finance ministry official, adding that the stake sale will take place in the first week of November.
Newly appointed disinvestment secretary Aradhana Johri is understood to have held meetings with merchant bankers in Mumbai on Monday to finalise the timeline for the stake sale.
While the Union Cabinet had last month approved the 5 per cent disinvestment in the state-owned oil explorer, the plan has got a fillip after the decision to de-regulate diesel prices and raised natural gas rates last Saturday.
While diesel prices reform is an important measure that will cut down the subsidy burden, combined with the hike in natural gas rates will help improve ONGC’s balance sheet.
Following the Cabinet decision, ONGC scrip jumped up by 5.44 per cent on Monday to close at Rs 418.85 a piece.
At the current market price, the sale of 5 per cent stake or over 42 crore shares, would fetch about Rs 18,000 crore to the exchequer.
The department of disinvestment has already appointed five merchant bankers including Citigroup, HSBC Securities, UBS Securities, ICICI Securities and Kotak Mahindra Capital for managing the stake sale.
The government had last sold 5 per cent stake in ONGC in 2012, raising Rs 14,000 crore.
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