The roadshows for sale of 10% government stake in Indian Oil Corporation (IOC), scheduled for October-end, have been deferred after the petroleum ministry refused to participate in them. A senior finance ministry official requesting anonymity told FE that the oil ministry changed its mind due to low market prices of the PSU shares at present and in the absence of clarity on how the subsidy payouts to the company would be impacted by the Kirit Parikh committee report.
The petroleum ministry's stance, articulated by petroleum secretary Vivek Rae recently, has come as surprise to the disinvestment department, which had no inkling of the ministry's reservations. A series of roadshows were scheduled for UK, US, Hong kong, Dubai and Singapore, among other countries.
The IOC share closed at R207 on the BSE on Thursday, 45% below its 52-week peak of R375 reached on January 18.
The disinvestment department was keen to conclude the issue before November as it is trying to push major stake sale proposals before December this year. A significant delay in IOC issue will defer issues of Coal India and Power Grid also. “I feel it is not the right time (for disinvestment), but the finance ministry and DoD are keen to go ahead,” oil secretary Vivek Rae had told reporters.
DoD, looking at mopping up R40,000 crore from the sale of shares in public sector units this fiscal, has raised about R1,325 crore so far. It plans to start a three-nation roadshow from October 6 to attract foreign investors for the IOC stake sale. The sale of 19.16 crore IOC shares at the current price would fetch the government about R4,000 crore. The government held a 78.92% stake in the country's largest oil refiner as of June 30.