Govt to sell 10% OIL stake to oil PSUs

The government decided to sell 10 per cent of its stake in Oil India Ltd to three other state-owned oil marketing companies even as it approved the company's maiden public issue through a fresh equity offer of 10 per cent of its paid-up capital.

Oil India is the second largest central government-owned petroleum exploration company.

The combined proceeds of the public issue and disinvestment are expected to be around Rs 3,000 crore. Around half the proceeds would accrue to the government and used for funding social sector programmes and reviving other central public sector firms.

The issue is expected to hit the market by next February. "The disinvestment will strengthen the existing synergies between these companies. The three companies will be able to raise resources by selling these shares in the open market at an opportune time to tide over their under-recoveries," said Information and Broadcasting Minister Priyaranjan Dasmunshi.

Petroleum ministry officials have in the past said they expect the public issue to mop up around Rs 1,500 crore. It would also mean that Oil India would meet market regulator Sebi's requirements for listing on the stock exchanges.

Officials said the disinvestment would be done at the price realised through the IPO process.

The Cabinet, which also met here today, approved the launching of the "Aam Admi Bima Yojana" from October 2. The policy will cover death and permanent disability of landless rural house families. The premium for the scheme has been fixed at Rs 200, which will be shared by the Centre and state governments.

In addition, a separate Rs 500-crore fund will be created for providing scholarships to children of the policy beneficiaries.