ONGC Stake Sale This Year May Help India Raise $3.1 Billion, Sharma Says
The planned sale of shares in Oil & Natural Gas Corp., India’s biggest energy explorer, may help the government raise $3.1 billion and achieve a third of this fiscal year’s asset-sale target.
“The 5 percent sale can raise about 145 billion rupees ($3.1 billion) at current prices,” R.S. Sharma, chairman and managing director, said by telephone from Mumbai today. “It will happen in the last quarter of this fiscal. It is in the queue and I don’t see any problems of it going through then.”
The government will sell the ONGC stake and 10 percent in Indian Oil Corp., the nation’s second-biggest refiner, Oil Secretary S. Sundareshan, the top bureaucrat in the ministry, said this week. ONGC alone may help Prime Minister Manmohan Singh’s government raise 36 percent of the 400 billion rupees targeted from asset sales in the year ending March to help fund the construction of roads, ports, hospitals and schools.
ONGC shares gained 0.2 percent to 1,356 rupees in Mumbai trading today. The stock has gained 15 percent so far this year compared with a 7 percent rise in the benchmark Sensitive Index of the Bombay Stock Exchange.
The ONGC share sale would be smaller than the divestment in Coal India Ltd., the world’s biggest producer of the fuel. The government may raise as much as 150 billion rupees from the sale of a 10 percent stake in the Kolkata-based company, two people with knowledge of the matter said in August.
That would make it India’s largest IPO, surpassing Reliance Power Ltd.’s 116 billion rupee offering in January 2008, according to data compiled by Bloomberg.
India plans to sell shares in Coal India starting Oct. 18, Chairman Partha Bhattacharyya said Aug. 31.
The government held 74 percent of ONGC and 79 percent of Indian Oil as of June 30, according to data compiled by Bloomberg.