In the biggest disinvestment announced this fiscal quarter, the government will sell a 10% stake in nation's largest oil firm IOC to raise about Rs 9,500 crore on Monday.
The government, which holds 68.6% interest in IOC, will sell 24.28 crore equity shares through an offer for sale (OFC) on Monday, the floor price of which will be announced tomorrow evening.
At least 20% of the offer size has been reserved for retail investors, who will also get a 5% discount to the cut-off price, the government said in a regulatory filing.
Stake sale in IOC will be the fourth disinvestment this fiscal and the biggest so far. The earlier three stake sales had raised just over Rs 3,000 crore.
The IOC stake sale will, however, dwarf in front of Rs 22,557 crore that the government raised through a stake sale in Coal India Ltd last year.
The government is targeting to raise Rs 69,500 crore from disinvestment in the current fiscal.
Indian Oil Corporation (IOC) is the nation's biggest oil refining and marketing company with 54.2 million tonnes of refining capacity or roughly one-fourth of India's total refining capacity of 215.1 million tonnes.
Besides, it owns and operates 24,405 petrol pumps - a little less than half of India's 53,419 filling stations.
Shares of IOC closed 0.70% down at Rs 394.45 apiece on the BSE on Friday.
At the current market price, sale of 24.27 crore shares, or 10% stake, would fetch the government around Rs 9,500 crore.
The decision to sell stake was taken after a ministerial level consultation between Finance Minister Arun Jaitley and Oil Minister Dharmendra Pradhan, a source said.
"The seller (Government of India) proposes to sell 24.27 crore equity shares of face value of Rs 10 each of the company aggregating to 10% of the total paid-up equity share capital," the regulatory notice said.
The OFS will open at 0915 hours on Monday and close on the same day at 1530 hours.
"No single bidder other than mutual funds and insurance companies shall be allocated more than 25% of the shares being offered," it said.
Retail investor has been defined as an individual investor who places bids for shares of total value of not more than Rs 2 lakh aggregate.
Five bankers handling the share shale - the biggest so far this fiscal -- are CitiGroup, Deutsche Equities, Nomura, JM Financial and Kotak Securities.
Due to volatile market conditions, the government has been able to sell stakes in only three PSUs -- PFC, REC and Dredging Corp -- this fiscal to raise over Rs 3,000 crore.
The disinvestment department has its pipeline ready for over two dozen PSUs, including ONGC, NMDC and Nalco.
Besides, it is planning to sale 10% stake in Coal India.