Govt meeting on ONGC divestment cancelled

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Source: Reuters
Source: Reuters

The Centre has cancelled a meeting of empowered group of ministers (EGoM) on divestment of Oil and Natural Gas Corporation (ONGC) that was to be held on February 27.

The EGoM was to decide the timeline of divestment of Centre’s 5 per cent stake in the oil firm, according to Oil Minister Jaipal Reddy. The EGoM is likely to decide on the timing of the issue as well as the base or reserve price for the auction.

Earlier, the EGoM meeting headed by Finance Minister Pranab Mukherjee was scheduled for February 24.

This will be the first stake sale by the Centre in nearly nine months along with subsequent divestment in other state firms.

Stake sale in ONGC may fetch around Rs 12,000 crore and together with the Rs 1,145-crore proceeds from PFC disinvestment, the government could be able to raise over Rs 13,000 crore in the current fiscal.

Stake sale in the Navratna was cleared by the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee on February 15.

The stake sale will take place via auction route on the stock exchanges.

The follow-on offer of ONGC shares was approved earlier but abandoned last November because of poor market conditions.

The planned offer would be the first sale through an auction on stock exchanges, after the capital market watchdog, the Securities and Exchange Board of India, notified guidelines for such sales on February 1.

The Centre has set up a divestment target of Rs 40,000 crore for the current fiscal but volatile market conditions have made it harder to implement these plans.

The government received Rs 22,763 crore from disinvestment proceeds in 2010-11, against a target of Rs 40,000 crore. It divested stake in six companies — SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India.