Ministers to meet again to finalise ONGC public issue

New Delhi: The panel of ministers will be meeting again within 10 days to finalise stake sale in bluechip company ONGC in the backdrop of the new guidelines by market regulator Sebi.

“We have discussed today the implications of the new Sebi guidelines. We are yet to take a decision in regard to mode and timing to be adopted (for divestment in ONGC),” Petroleum Minister Jaipal Reddy told reporters after a meeting of empowered group of ministers (EGoM) on disinvestment. The EGoM, officials said, will meet again in the 8-10 days to finalise the modalities for stake sale in ONGC.

The ministers, sources said, discussed the implications of the Institutional Placement Programme (IPP) guidelines issued by the market regulator Securities and Exchange Board of India (Sebi) earlier in the week.

[caption id=“attachment_201750” align=“alignleft” width=“380” caption=“Oil Minister Jaipal Reddy told after a meeting of EGoM on disinvestment that they will meet again in the 8-10 days to finalise the modalities for stake sale in ONGC.”] [/caption]

As per the new IPP norms, promoters will be allowed to sell only up to 10 percent of their stake to maintain minimum public shareholding of 75 percent in private sector companies and 90 percent in case of publice sector units.

The notification is expected to help the government, which is hard pressed for funds, to expedite disinvestment process by introducing the new private placement mechanism. Reddy expressed the hope that government would be able to complete 5 percent stake sale in oil major ONGC in the current fiscal itself (ending 31 March).

“We have not taken a view. We will meet once again when the deputy chairman of planning commission is available. We will then take a final call. Both the options are open (follow-on public offer and auction route). It will be our attempt to do something in this fiscal,” he said.

The government plans to sell 5 percent, or 427.77 million shares, either through the follow-on public offer (FPO) or IPP. After the dilution, its stake in ONGC will come down to 69.14 percent from 74.14 per cent.

Disinvestment secretary Mohammad Haleem Khan, who was present in the meeting, said the Cabinet approval will be sought, if required, for the IPP or auction route. On the proposed disinvestment in BHEL, Reddy added, the discussion on the matter was not taken up because “Heavy Industries Minister Praful Patel was not there”.

Although the government had planned to raise Rs 40,000 crore from disinvestment in the current fiscal, it has not been able to make much headway because of uncertain market conditions. So far, it has raised only Rs 1,144 crore from stake sale in Power Finance Corporation (PFC).

Volatile stock market conditions is forcing the government to delay stake sale in PSUs. World equity markets have been on a downside on fears of debt crisis in Eurozone economies and global slowdown.

PTI