Indian Oil Corp down 3.5% on govt's decision to sell stake

Indian Oil Corporation (IOC) declined around 3.5 percent to Rs 189 on government’s decision to divest 10 percent stake in the firm. The news may not have gone well with investors, as volatile rupee and burgeoning under-recoveries may pose difficulties in valuation.

However, according to CNBC-TV18, the government is likely to delay divestment of stake in Indian Oil Corp  until rupee volatility eases. IOC divestment was likely to take place in August to meet Securities and Exchanges Board of India (Sebi)'s minimum public float norm for public sector units.

Also, there are question marks over the subsidy sharing mechanism for this year and how much subsidy the government is actually going to give to the oil marketing companies (OMCs). So, once clarity is achieved on those lines the government may go ahead with Indian Oil divestment.

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