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India to Auction ONGC Stake in Next Couple of Days, Reddy Says

Feb. 28 (Bloomberg) -- India plans to auction a stake in Oil & Natural Gas Corp. in the “next couple of days” after failing to meet a revenue target from public offerings of shares in state-owned companies this year.

A panel of ministers, which met today, decided on the sale of a 5 percent stake in ONGC and set a minimum price for the shares, Oil Minister S. Jaipal Reddy told reporters in New Delhi today, without giving more information. The state owns 74 percent of the nation’s biggest energy explorer.

The stock exchanges will be notified tonight about the auction, Reddy said. The sale will be open for one day, he said.

A 25 percent slump in the benchmark Sensitive Index in 2011 undermined efforts to sell shares of state-owned companies, with the government meeting 3 percent of its 400 billion rupee ($8.1 billion) target for the year ending March 31. The budget shortfall may widen beyond Finance Minister Pranab Mukherjee’s goal of 4.6 percent as slowing economic growth reduces revenue receipts.

ONGC shares rose 0.8 percent to 283.40 rupees at close in Mumbai, valuing the 5 percent stake at 121.3 billion rupees. The Sensex index has rebounded 15 percent this year.

To contact the reporters on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net; Anto Antony in New Delhi at aantony1@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

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