ONGC, OIL may buy IOC stake at Rs 220 a share
7 March 2014 6:28 AM IST
An Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram had on 28 February decided to sell the stake in IOC, the nation's largest oil firm, at a discount of 10 per cent through an off-market deal.
Sources said the IOC scrip traded at about Rs 245 on that day and a 10 per cent discount to that price was calculated to arrive at a selling price of Rs 220 a share. Also, Rs 220 is the three-month average trading price of IOC shares.
The sale of the 10 per cent stake, or 24.27 crore shares, will be through an off-market transaction, with Oil and Natural Gas Corp (ONGC) and OIL each buying 5 per cent. The transaction may take place on 14 or 15 March, they said. Oil Minister M Veerappa Moily had on 28 February confirmed the sale would will happen at 10 per cent discount.
‘The two companies (ONGC and OIL) will now work out the deal and the stake sale will happen very shortly. It should be happening in next few days...It will be an off-market deal,’ then Oil Secretary Vivek Rae stated after the EGoM meeting. IOC shares have gained more than Rs 42 since 16 January, when the EGoM on disinvestment cleared the stake sale at the current market price, plus/minus 1 per cent.
ONGC and OIL, however, wrote to the Petroleum Ministry saying they would each buy a 5 per cent stake in IOC at the six-month average traded price and not at the current rate. The government then decided to offer the IOC shares to the companies at a 10 per cent discount to the current market price through an off-market deal.
ONGC currently holds an 8.77 per cent stake in IOC. Although the Cabinet had originally cleared the stake sale in Indian Oil Corporation through an offer for sale, the Finance Ministry had to go in for the block deal route after opposition from the Petroleum Ministry.
The Oil Ministry had argued that Indian Oil Corporation shares should not be sold through an offer for sale as the current price did not reflect the right valuation of the company.
LIC raises its stake in Bhel to 14.99%
New Delhi: State-owned Life Insurance Corporation has bought government's 5.94 per cent stake in power equipment maker Bhel for Rs 2,685 crore.
After this share purchase, LIC's stake in Bhel is 14.99 per cent, up from 9.05 per cent. LIC purchased 14.54 crore shares, amounting to 5.94 per cent stake, in Bhel during 3-4 March through open market route for Rs 2,685 crore (Rs 184 apiece), Bhel informed stock exchanges. Bhel scrip closed at Rs 173.55, up 3.92 per cent, on the NSE. The government held 67.72 per cent stake in Bhel at the end of December, 2013. An Empowered Group of Ministers, headed by Finance Minister P Chidambaram, had decided last week that the insurer would acquire stake in the power gear maker.
In August 2011, the Cabinet had cleared sale of 5 per cent stake in Bhel through a follow-on public offer (FPO). However, the Heavy Industry and Public Enterprises Ministry was opposed to proposed disinvestment because of choppy market conditions. The company in April 2012 withdrew the draft prospectus filed with market regulator Sebi.
The government has so far raised about Rs 5,093.87 crore through stake sale in PSUs. As per the revised estimates in the Interim Budget, the disinvestment target was lowered to Rs 16,027 crore in this financial year from Rs 40,000 crore.
Sources said the IOC scrip traded at about Rs 245 on that day and a 10 per cent discount to that price was calculated to arrive at a selling price of Rs 220 a share. Also, Rs 220 is the three-month average trading price of IOC shares.
The sale of the 10 per cent stake, or 24.27 crore shares, will be through an off-market transaction, with Oil and Natural Gas Corp (ONGC) and OIL each buying 5 per cent. The transaction may take place on 14 or 15 March, they said. Oil Minister M Veerappa Moily had on 28 February confirmed the sale would will happen at 10 per cent discount.
‘The two companies (ONGC and OIL) will now work out the deal and the stake sale will happen very shortly. It should be happening in next few days...It will be an off-market deal,’ then Oil Secretary Vivek Rae stated after the EGoM meeting. IOC shares have gained more than Rs 42 since 16 January, when the EGoM on disinvestment cleared the stake sale at the current market price, plus/minus 1 per cent.
ONGC and OIL, however, wrote to the Petroleum Ministry saying they would each buy a 5 per cent stake in IOC at the six-month average traded price and not at the current rate. The government then decided to offer the IOC shares to the companies at a 10 per cent discount to the current market price through an off-market deal.
ONGC currently holds an 8.77 per cent stake in IOC. Although the Cabinet had originally cleared the stake sale in Indian Oil Corporation through an offer for sale, the Finance Ministry had to go in for the block deal route after opposition from the Petroleum Ministry.
The Oil Ministry had argued that Indian Oil Corporation shares should not be sold through an offer for sale as the current price did not reflect the right valuation of the company.
LIC raises its stake in Bhel to 14.99%
New Delhi: State-owned Life Insurance Corporation has bought government's 5.94 per cent stake in power equipment maker Bhel for Rs 2,685 crore.
After this share purchase, LIC's stake in Bhel is 14.99 per cent, up from 9.05 per cent. LIC purchased 14.54 crore shares, amounting to 5.94 per cent stake, in Bhel during 3-4 March through open market route for Rs 2,685 crore (Rs 184 apiece), Bhel informed stock exchanges. Bhel scrip closed at Rs 173.55, up 3.92 per cent, on the NSE. The government held 67.72 per cent stake in Bhel at the end of December, 2013. An Empowered Group of Ministers, headed by Finance Minister P Chidambaram, had decided last week that the insurer would acquire stake in the power gear maker.
In August 2011, the Cabinet had cleared sale of 5 per cent stake in Bhel through a follow-on public offer (FPO). However, the Heavy Industry and Public Enterprises Ministry was opposed to proposed disinvestment because of choppy market conditions. The company in April 2012 withdrew the draft prospectus filed with market regulator Sebi.
The government has so far raised about Rs 5,093.87 crore through stake sale in PSUs. As per the revised estimates in the Interim Budget, the disinvestment target was lowered to Rs 16,027 crore in this financial year from Rs 40,000 crore.
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