In addition to funds raised via stake sale, the companies are also expected to shell out Rs 10,000-crore by way of share buyback, the report says quoting sources close to the matter.
The government plans to divest stakes of up to $2 billion in public sector undertaking (PSU) entities such as Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India (OIL) to meet its disinvestment target for the year, according to an Economic Times report.
The companies are also expected to shell out Rs 10,000 crore by way of share buyback programs.
The proceeds of the sale along with buybacks will help achieve the Rs 80,000 crore divestment target, a fourth of which have already been achieved by the Finance Ministry. As part of the stake sale, the government will be looking to sell 5 percent of assets in ONGC, 3 percent in Indian Oil and about 10 percent in Oil India.
Once the divestment goes through, the government would earn approximately Rs 10,000 crore from ONGC (5 percent stake at Rs 156 per share), Rs 4,200 crore from IOC (3 percent stake at Rs 143.25 per share) and approximately Rs 2,300 crore from Oil India (10 percent stake at Rs 199.10). These shares would be offloaded at a 5 percent discount to the market rates.
The stake sale plan comes after the exchequer issued an offer for sale OFS in Coal India earlier this month where it sold 3 percent stakes. After the sale, government's holding in ONGC, IOC and Oil India will stand at 62.48 percent, 53.75 percent and 56.13 percent, respectively.
According to a regulatory filing, Oil India is considering a share buyback proposal on November 19. The market is also expecting ONGC and Oil India to consider similar proposals. The companies are expected to buyback shares worth approximately Rs 1,100 crore, Rs 4,800 crore and Rs 4,000 crore, respectively.
