IOC sells 1.9 % ONGC stake for $814 mn

Indian Oil Corp sold this stake in Oil and Natural Gas Corp Ltd to pay off debt and fund expansion, IOC Chairman Sarthak Behuria said on Thursday.

Indian Oil Corp (IOC) has sold a 1.92 per cent stake in Oil and Natural Gas Corp Ltd (ONGC) for 36.72 billion ($814 million) to pay off debt and fund expansion.

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IOC Chairman Sarthak Behuria said this on Thursday.

The sale of 27.4 million shares at 1,340 rupees each to Indian and foreign institutional investors, gave the state-run oil refiner a gain of $715 million. The shares were bought by IOC at about 162 rupees about seven years ago.

"This is a good value unlocking for IOC," said Gautami Desai, who manages $48 million in India's only petroleum sector fund at UTI Asset Management Co Ltd.

Shares in state-run ONGC, India's top oil producer, were trading 2.7 per cent lower at 1,349 rupees by 12:30pm in a firm Mumbai market, while IOC was up 0.9 per cent at 566.60 rupees.

"We will use the funds to reduce our debt, borrowings and also for our capital expenditure," Behuria said.