The Central Government plans to divest five per cent of its stake in that Oil and Natural Gas Corporation (ONGC), an exercise which is expected to contribute greatly in meeting the disinvestment targets for the present fiscal year.
However, the exact quantum of stake sale has not been revealed yet. It is expected to be around five per cent. At current prices, it is expected to bring Rs 11, 300 crore to government coffers.
The government had mopped up a record Rs 1 lakh crore in disinvestment receipts the previous fiscal year, but revenues this year have been muted so far. It is expected that the ONGC stake sale would provide momentum to the disinvestment process this fiscal with the government focusing on small stake sales in view of the volatility in the markets.
Previous initiatives to offload some of the government stake in ONGC, which is around 67 per cent as of now, had faced roadblocks due to the company shouldering some of the burden of fuel subsidies. The practice of sharing the fuel subsidy between the government and the company was discontinued in 2016 and the recent shelving of a plan to resume this practice should encourage investors to participate in the disinvestment exercise.
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