According to sources, the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, has cleared the ONGC stake sale proposal.
Earlier this week, the disinvestment department had selected 5 merchant bankers - Citigroup and HSBC Securities, UBS Securities, ICICI Securities and Kotak Mahindra Capital for managing the stake sale.
The ONGC scrip closed at Rs 445.30, down 0.79 per cent, on the BSE. At the current market price, the 5 per cent stake sale or over 42 crore shares, would fetch over Rs 18,000 crore to the exchequer.
The merchant bankers will advise the government on the timing and modalities of Offer For Sale (OFS) and ensure best returns to the government, which holds 68.94 per cent stake in ONGC.
The Cabinet nod for the ONGC stake sale comes as the Petroleum Ministry too has consented to the stake sale.
The government had last sold 5 per cent stake in ONGC in 2012 for Rs 14,000 crore.
In the current fiscal the government plans to mop up Rs 43,425 crore from selling stake in various state-owned firms.