A day after the government’s disinvestment in Indian Oil Corporation sailed through despite domestic bourses tanking, the oil PSU said the Life Insurance Corporation of India has increased its stake in the company to 11.11 per cent from 2.52 per cent.
“Life Insurance Corporation of India has submitted the disclosures under Reg. 29 (2) of Sebi (SAST) Regulations, 2011,” the company said in a filing to the Bombay Stock Exchange, adding that the life insurer acquired 20.87 crore shares amounting to 8.59 per cent stake.
This translates into nearly 86 per cent of the 24.28 crore shares on offer as part of the disinvestment in IOC.
Back of the envelope calculations reveal that at the floor price of Rs 387 per share, LIC purchased shares worth over Rs 8,000 crore to help the IOC disinvestment sail through, a practice that has been followed even before by the government to ensure PSU stake sales have sufficient response.
“The Indian Oil Corporation Ltd OFS has been endorsed by the institutional investors as the issue was oversubscribed, and the Institutional bucket subscribed 143 per cent and the retail bucket subscribed 18 per cent,” the finance ministry had said.
Institutional investors bid for 27.85 crore shares as against 19.42 crore shares on offer while retail investors bids for just 88.88 lakh shares against 4.85 crore shares on offer.
Meanwhile, the finance ministry had also spoken to domestic institutional investors including Life Insurance Corporation of India to boost interest in the stake sale.
“Calls are made to all investors. Right along the line calls are made to every investor by us, by our merchant bankers in a situation of crisis like this to every actor. We even spoke to stock exchanges,” disinvestment secretary Aradhana Johri had said.
The Centre mopped up Rs 9,379 crore from the IOC share sale, the biggest this fiscal. Earlier it raised Rs 3,300 crore from disinvestment in Dredging Corporation of India, Power Finance Corporation and Rural Electrification Corporation.
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