India’s government plans to sell a stake in Oil & Natural Gas Corp., the nation’s biggest energy explorer, as planned, Disinvestment Secretary Sumit Bose said, denying a report which said the sale would be delayed.
“There is no change in the ONGC share-sale plan, it’s scheduled for March,” Bose said by telephone from New Delhi today in response to queries after the Economic Times said the sale may be delayed. “Only yesterday, we issued letters appointing bankers and legal advisers.”
The 5 percent stake offering in state-owned ONGC may be pushed to the year starting April 1 because rising oil prices may increase the explorer’s fuel subsidy burden, the Economic Times reported, citing an unidentified cabinet minister.
The government has clarified ONGC won’t share more than one-third of the revenue loss from selling fuels below cost, Bose said. It doesn’t matter where oil prices are, Bose said.
Profit in the three months ended Dec. 31 may be “hurt” because of larger discounts on oil sold to state refiners, ONGC Chairman R.S. Sharma said Jan. 6. The subsidy bill climbed 21 percent to 42.2 billion rupees, the Press Trust of India reported Jan. 18, citing an unidentified person.
ONGC is scheduled to report earnings on Jan. 28.
The New Delhi-based company’s shares have declined 14 percent in the past month, exceeding the 5 percent fall in the benchmark Sensitive Index. The stock dropped 1 percent to 1,122.95 rupees at 11:54 a.m. in Mumbai trading.
The stake sale would raise $2.6 billion for the government, based on the current share price.
Citigroup Inc., Nomura Holdings Inc., Bank of America Corp., HSBC Holdings Plc, JM Financial Services Ltd. and Morgan Stanley, may manage ONGC’s share sale, two people with knowledge of the matter said Jan. 16.
Crude oil in New York trading gained 18 percent in the past year, increasing revenue losses for India’s state-owned refiners, which sell diesel and cooking fuels below cost in an effort to curb inflation.
The Indian government has raised about half its 400 billion rupee ($8.7 billion) target for asset sales in the year ending March 31 by selling shares in companies including Coal India Ltd.
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