The Govt. of India has made a very smart move in deciding to divest 10% of its stake in Oil India just after couple of weeks of partial diesel decontrol. The government had on January 17 allowed retailers to raise diesel prices by small quantum every month to cut the Rs 96,000 crore deficit on the fuel sale. Consequently the stocks of upstream oil companies specially ONGC and OIL has been on fire since then on the expectation of much lower subsidy burden 2 years down the line. The stock price OIL has gone up almost 16% in past 1 month and has added almost 4200 crores to it's market value since then.
The Govt.has fixed the minimum price for the offer for sale (OFS) of its 10% stake in Oil India at Rs 510 per share, a 5.41% discount to its current market rate as on 31st Jan 2013, to garner Rs 3,065 crore for the exchequer. Shares of OIL closed at Rs 539.20, up 2.29% over previous close on the BSE. The government holds 78.43% stake in the company and would come down to 68.43% post the OFS.
Post a Comment