State-owned Indian Oil Corporation (IOC) Rs 15,000 crore and sale of shares has been postponed until the end of this year due to unfavorable market conditions and rising world prices of crude oil.
Department of disinvestment (DoD) last week held a closed meeting IOC top brass, including Chairman RS Butola to discuss the tender offer represents a 10% stake sale by the government and an equal number of new shares the company.
"IOC, said the Defense Department that the conditions were not favorable for a public offering of up (FPO) and the government must now wait longer," said a source aware of the meeting.
The FPO was planned prior to the first quarter of calendar year 2011 but was postponed to the uncertain market conditions.
"Market conditions are just not suitable for a share sale now, the leadership of the IOC, said the Department of Defense," the source said, adding that the Defense Department in accordance with the IOC evaluation and decided to consider the situation at the end of the year.
The program for the sale of individual stocks is expected to gather around Rs 15,000 crore.
IOC had last year hired six investment banks - Merrill Lynch, Citigroup, ICICI securities, Morgan Stanley and UBS Capital OSE - to manage the tender offer.
The offer was part of Mega government Rs 40,000 crore for the divestment program for the current year.
The sources said that diesel prices IOC wants to be freed from government control before the public offering to raise funds double maximum.
The government had in June last year and released deregulated price of gas in your control and announced the intention to do the same with the rates of diesel. More than a year since then, the state fuel retailers are still selling diesel at subsidized prices.
"IOC believes that the deregulation of petrol prices will unlock the true value of the [IOC]," the source said.
IOC and its sister companies in the public sector Hindustan Petroleum and Bharat Petroleum currently sell diesel to Rs 6. 06 liters and a loss after tax including the desired increase in retail prices in Delhi would be Rs 6.82 per liter.
The government has been planning since last year to sell its stake of 5-10% of the IOC and Oil and Natural Gas Corporation (ONGC) through separate FPO looking around Rs 18,000 crore.
While the government aims to sell 5% stake in ONGC, the divestiture of 10% on the cards of the IOC.
Along with the sale of the government, the IOC's plans make a public offer of its shares by 10% extended to raise about Rs 9000 crore for the financing of their capital expenditures.
Post selling participation, government participation in the ONGC will be reduced to 69.14% from 74.14%. The IOC divestment and the double sale of the government is reduced to the holding of 78.92% to 64.57%.
Department of disinvestment (DoD) last week held a closed meeting IOC top brass, including Chairman RS Butola to discuss the tender offer represents a 10% stake sale by the government and an equal number of new shares the company.
"IOC, said the Defense Department that the conditions were not favorable for a public offering of up (FPO) and the government must now wait longer," said a source aware of the meeting.
The FPO was planned prior to the first quarter of calendar year 2011 but was postponed to the uncertain market conditions.
"Market conditions are just not suitable for a share sale now, the leadership of the IOC, said the Department of Defense," the source said, adding that the Defense Department in accordance with the IOC evaluation and decided to consider the situation at the end of the year.
The program for the sale of individual stocks is expected to gather around Rs 15,000 crore.
IOC had last year hired six investment banks - Merrill Lynch, Citigroup, ICICI securities, Morgan Stanley and UBS Capital OSE - to manage the tender offer.
The offer was part of Mega government Rs 40,000 crore for the divestment program for the current year.
The sources said that diesel prices IOC wants to be freed from government control before the public offering to raise funds double maximum.
The government had in June last year and released deregulated price of gas in your control and announced the intention to do the same with the rates of diesel. More than a year since then, the state fuel retailers are still selling diesel at subsidized prices.
"IOC believes that the deregulation of petrol prices will unlock the true value of the [IOC]," the source said.
IOC and its sister companies in the public sector Hindustan Petroleum and Bharat Petroleum currently sell diesel to Rs 6. 06 liters and a loss after tax including the desired increase in retail prices in Delhi would be Rs 6.82 per liter.
The government has been planning since last year to sell its stake of 5-10% of the IOC and Oil and Natural Gas Corporation (ONGC) through separate FPO looking around Rs 18,000 crore.
While the government aims to sell 5% stake in ONGC, the divestiture of 10% on the cards of the IOC.
Along with the sale of the government, the IOC's plans make a public offer of its shares by 10% extended to raise about Rs 9000 crore for the financing of their capital expenditures.
Post selling participation, government participation in the ONGC will be reduced to 69.14% from 74.14%. The IOC divestment and the double sale of the government is reduced to the holding of 78.92% to 64.57%.