NEW DELHI, Dec 21: The core group on disinvestment, slated to meet on Tuesday, will have a strong case for paring down the global depository receipts (GDR) issues of the oil blue chips, Indian Oil Corporation (IOC) and the Gas Authority of India Limited (GAIL), slated to hit the road before March next year.The inter-ministerial taskforces working on the two equity offerings do not seem to have arrived at any conclusion on the timing or the size of the issues. Even though the official version is "no comments" at both the union ministry of petroleum and the corporarte headquarters of the oil public sector undertakings.North Block's keenness to raise at least part of the Rs 7,000 crore planned through disinvestment before the end of the fiscal, is not much of a secret any more. The GAIL issue, which was offered and then withdrawn last month, is expected to go back on the road sometime in February. The IOC issue is unlikely to be held back either, even though both the company and its global advisers have every reason to hold on to it till a more opportune time.The core group, feel think-tanks in government, would probably have to marry the interests of the differing ministries, by going ahead with the disinvestment but not going whole hog with it. The Centre initially planned to raise at least $ 800 million from a GDR offer of 210 million GAIL shares, equivalent to 25 per cent of the Centre's holding.The issue was withdrawn last month, when prices did not live up to expectations. A five per cent disinvestment of the Union government's 91 per cent stake in IOC should have made a smaller killing, but the Centre subsequently began contemplating raising at least $ 600 million from the GDR offering.No decision seems to have been taken at the inter-ministerial taskforce working on IOC's GDR, for which roadshows were originally intended to begin in February or March. A demand from the company that it be allowed to float some fresh equity for its own investment plans along with the GDR, had compelled the ministries of petroleum and finance to re-work the cabinet's approval for a five per cent disinvestment in the company.The Union finance ministry approved a 10 per cent disinvestment in the Rs 43,862 crore-turnover oil refining and marketing company. The new mandate from the mandarins of North Block should have enabled the taskforce to plan for a 15 per cent equity float, including a five per cent initial public offer (IPO) by IOC.The dissolution of the Union Parliament, in the meanwhile, did not allow the Cabinet to mull over the new proposal. The questions before the core roup now will be whether to go ahead with the five per cent disinvestment in IOC as first plannned, or to hold it in abeyance till a new government is able to study the proposal for a bigger equity float from the company.It would be in IOC's interest to hold on to the issue, especially since the Rs 18,000 crore oil bonds and the collateral security they bring with them, have not materialised as yet. The oil bonds, that should convert the dues of the oil companies from the oil pool account into investments, should lend a healthier glow to market offerings of the national oil companies. The absence of a full-fledged government at the Centre does not strengthen the case for a healthy book-building on the GAIL and IOC issues. The GAIL scrip is trading at around Rs 120 on Dalal Street, while IOC manages to fetch a price of roughly Rs 650.The expected pressure from North Block to push through with the disinvestment and that from other quarters to think again, may ultimately result in trimming the issue sizes for the time being.
