Insurance major rescues Indian Oil from slipping on manic Monday

Disinvestment secretary Aradhana Johri admits that the government did not expect a global meltdown on Monday

GN Bureau | August 25, 2015


#disinvestment   #indian oil   #ioc   #sensex   #shares  

Disinvestment secretary Aradhana Johri said it was a very difficult day. “Still we are happy to have got the value despite huge volatility,” she said. She should be happy as the government managed to garner Rs.9,379 crore from the sale of 10% of its stake in Indian Oil Corp. Ltd on Monday as domestic institutional investors bailed out the disinvestment while retail buyers stayed away amid a rout on the stock market.

There were no road shows and the plan to sell was unvieled on Friday. The issue didn’t see too much interest from foreign institutional investors.But the majority of the issue was subscribed by domestic institutions. With most investors turning sellers on Monday, the government had to depend on Life Insurance Corp. of India (LIC) to help the Indian Oil issue sail through.

Johri said the government did not expect a global meltdown on Monday. “If the assessment had been that there would be a global meltdown, then naturally you don’t enter the market with that information,” she said.

Asked whether calls were made to LIC and government-owned banks to buy the offer for sale (OFS), Johri said calls were made to all potential investors, including retail investor associations.

Johri said though volatility has increased in recent times, the government will look for opportunities for further divestment. “We have to rethink our strategy. Basically, we have to look at which are the stocks we need to put on the market and where the appetite in the market lies,” she said.

Johri said retail investors have gone by market sentiments and not done real calculations. “They would have still gained given the stock closed at 378 while it was offered at 368 to retail investors after 5% discount,” she said.

Indian Oil shares closed the day at Rs.378.25, down 4.11% on BSE. The floor price for the share sale was set at Rs.387. The share sale was supposed to fetch the government almost Rs.9,400 crore at the floor price.

This is the fourth divestment by the government this fiscal year and the second this month. Earlier, it had divested part of its stakes in Rural Electrification Corp. Ltd (REC), Power Finance Corp. Ltd (PFC) and Dredging Corp. of India Ltd.

On Friday, the government raised Rs.53.4 crore from the divestment of its stake in Dredging Corp., while the PFC stake sale raised Rs.1,600 crore last month and the REC sale raised Rs.1,610 crore in April.

The government is also looking to appoint bankers for divesting a 10% stake in Coal India Ltd, which could fetch it up to Rs.23,000 crore.

Bankers have also been appointed for the sale of stakes in NTPC Ltd, Bharat Electronics Ltd, Engineers India Ltd, National Aluminium Co. Ltd and Hindustan Copper Ltd.

Comments

 

Other News

El Niño threatens India’s Rabi crops

India’s southwest monsoon ended with a 13% rainfall deficit in 2026, its weakest performance in a decade, raising concerns over agricultural production, water security and the upcoming rabi season. With El Niño expected to persist into early 2027, experts warn that declining soil moisture, dep

Regulating the data advantage: India’s new e-Commerce framework

For over a decade, India’s e-commerce story has rested on a simple premise: platforms connect buyers and sellers, while data fuels efficiency, personalisation, and scale. However, as the market matured, its structure has revealed a growing imbalance. E-commerce platforms, especially marketplace ent

Changing weather patterns, climate change responsible for Nepal floods

The interaction between active Western Disturbances, increased atmospheric moisture and the region’s complex topography aswell as global warming are important factors behind intense rainfall in the Himalayas, leading to flash floods in Nepal, according to meteorologists. Nepal

A right she cannot reach

Last summer, the two of us spent several weeks in rural Madhya Pradesh with a non-profit that works on gender justice through women’s self-help groups. We went in with a notebook full of laws. The Protection of Women from Domestic Violence Act. The Dowry Prohibition Act. Free legal aid for every wo

Tier-2 cities lead India’s digital credit push

Digital payments have become a reflex for urban India, but the confidence earned in paying has not yet carried over to borrowing. That is the central finding of `How Urban India Pays Report 2026`, released by Pahlé India Foundation in collaboration with Amazon Pay. Based on a survey of 5,149 consu

India calls for doubling bilateral trade with UK by 2030

Commerce and industry minister Piyush Goyal has called upon businesses in India and the United Kingdom to translate the opportunities created by the India-UK Comprehensive Economic and Trade Agreement (CETA) into expanded trade, investment, partnerships and job creation. Addressing the Bu

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter