"The ONGC stake sale through the auction route (will take place) in couple of days. Notices will be send to stock exchanges tonight", Oil Minister Jaipal Reddy told reporters after the meeting of the Empowered Group of Ministers (EGoM) which was chaired by Finance Minister Pranab Mukherjee.
The day-long auction, according to sources, will take place on March 1 and the floor price for the bids is likely to be around 5 to 7 per cent of the monthly average stock price.
The floor price, they added, would be handed over in a sealed envelope to the stock exchanges and would not be declared to the bidders. The government owns 74.14 per cent stake in ONGC and proposes to offload 427.77 million shares or 5 per cent equity.
The sale, in which financial institutions are expected to participate, may fetch the hard-pressed government about Rs 12,000 crore. The government in the budget for 2011-12 had envisaged to raise Rs 40,000 crore through PSU disinvestment, but in about 11 months it could mop up only Rs 1,145 crore from stake sale in the Power Finance Corporation (PFC).
The government had earlier postponed stake sale in several state-owned companies on account of poor market conditions. The EGoM at its meeting earlier in the month also decided to postpone equity sale in the engineering major BHEL to the next fiscal.
The ONGC shareon Tuesday closed 1.02 per cent, up at Rs 283.55 a piece on Bombay Stock Exchange (BSE).