IOC’s Rs 6,400-crore share sale in the offing
On Thursday, the department of investment and public asset management (DIPAM) called the country’s top 10 merchant bankers for their presentations.business Updated: May 26, 2017 18:27 IST
The government is set to sell a 3% stake in the country’s biggest fuel retailer Indian Oil Corp, which will be the first big ticket offer of the Rs 72,500-crore disinvestment plan for 2017-18.
The share sales are crucial for the government to meet the fiscal deficit target of 3.2% of GDP in 2017-18, and fund infrastructure and social projects.
IOC shares were down 3% to Rs 425.90 on Friday. On Thursday, the shares had risen as much as 3% after IOC reported 85% jump in net profit during fourth-quarter.
On Thursday, the department of investment and public asset management (DIPAM) called the country’s top 10 merchant bankers for their presentations.
On Friday, Reuters reported that the government is set to hire Citigroup, Deutsche Bank, Goldman Sachs, ICICI Securities and SBI Capital for the share sale that could fetch about Rs 6,400 crore. The government owns 58.3% of IOC.
Last month, the government listed seven blue-chip state-run companies--Indian Oil Corp, Steel Authority of India, National Thermal Power Corp, Rural Electrification Corp, Power Finance Corp, Neyvelli Lignite Corp and hydro power company NHPC--for disinvestment.
The stake sale in these seven companies could fetch the government about Rs 35,000 crore.
The government has already sold shares of Nalco and Hudco to raise close to Rs 2,400 crore.
The process has started for appointing legal advisers and merchant bankers for Rail Vikas Nigam Ltd, IRCON International Ltd, Indian Railway Finance Corporation Ltd, Indian Railway Catering and Tourism Corporation Ltd, RITES Ltd, Bharat Dynamics Ltd, Garden Reach Shipbuilders & Engineers Ltd, Mazagon Dock Shipbuilders Ltd (MDSL), North Eastern Electric Power Corp, MSTC Ltd and Mishra Dhatu Nigam Ltd.
The government also has plans to list five state-owned insures—New India Assurance Company Ltd, United India Insurance Company Ltd, Oriental Insurance Company Ltd, National Insurance Company Ltd, and General Insurance Corporation of India.
The government has set a target of Rs 46,500 crore through small stake sales and Rs 15,000 crore from strategic disinvestment during 2017-18.