ONGC stake sale gets nod,BHEL to wait

The follow-on public offer for the oil giant is expected to yield around Rs 12,000 crore this fiscal

Written by ENS Economic Bureau | New Delhi | Published: February 16, 2012 12:42:06 am

An Empowered Group of Ministers (EGoM) on Wednesday approved the auction route for selling 5 per cent stake in state-run oil major ONGC before the end of the current fiscal. The proposed disinvestment of government stake in BHEL has,however,been postponed to the next fiscal.

The EGoM,headed by Finance Minister Pranab Mukherjee,met to decide on stake sale in the two major PSUs with a view to mopping up about Rs 14,500 crore in the current fiscal,up from the Rs 1,145 crore raised so far.

With BHEL now out of the divestment agenda for the current fiscal,only the ONGC follow-on issue is expected to garner additional revenues of around Rs 12,000 crore for this fiscal year. The panel would meet again to decide on the time and base price of the stake sale.

“The EGoM has taken a decision to exercise the option (of auction route of Sebi)… in respect of ONGC and BHEL. As for further decision (timing and price),EGoM is going to meet shortly again. For all other decisions,next meeting will have to be awaited,” Petroleum Minister Jaipal Reddy told reporters after the meeting.

Disinvestment Secretary Mohammad Haleem Khan,however,made it clear that the target of Rs 40,000 crore “is now almost impossible (to meet)”.

So far,the government has been able to garner only Rs 1,145 crore from selling stakes in Power Finance Corporation.

After the meeting,Heavy Industries Minister Praful Patel said,“We have not taken any decision on BHEL. At this moment,we feel it is a little premature. Sentiments about the power sector at this moment are low … the approach or outlook is not bright or positive.”

The auction route

Sebi,in January,announced an auction route to expedite stake sale by promoters by opening a separate window in stock exchanges in which all categories of investors — retail,HNIs,institutional investors and employees — can participate. The promoter will decide a day for the auction and indicate a floor price. ENS

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