IOC disinvestment should happen in appropriate mkt: Moily

With overseas investor roadshows drawing poor response, Oil Minister M Veerappa Moily on Friday said the disinvestment of 10 percent stake in nation's largest oil firm, Indian Oil Corp (IOC) should happen in an appropriate market.

Also Read: Moily hints at moderation in diesel price hike

"The question is market has to behave properly. We don' want to go to the market where we are not going to get the right price," he told reporters here.

IOC scrip closed at Rs 199.25 on the BSE, nearly 47 percent below the 52-week peak of Rs 375 reached on January 18. Investors at promotional roadshows in the US, the UK and Singapore questioned the timing of the stake sale as there is no clear roadmap yet to address the lingering fuel subsidy issue.

Moily, however, said that the decision about timing of the disinvestment would be taken by his ministry and the ministry of finance together after due consultations.

"It (disinvestment) will happen at appropriate time. IOC today is India's number one company and I don't want that kind of credibility and stability of IOC to be shaken," he said.

"Our companies interest will also have to be taken into consideration (when deciding on disinvestment)," he added. Moily said his ministry would cooperate fully with the finance ministry on disinvestment of IOC.

Finance Ministry is keen on IOC stake sale to meet the fiscal's disinvestment target of Rs 40,000 crore. The sale of 19.16 crore IOC shares at the current price would fetch the government less than Rs 3,900 crore. The government holds 78.92 percent stake in the country's largest oil refiner as on June 30.

Citibank, HSBC and UBS Securities are among the five merchant bankers selected to manage the IOC share sale. IOC has 10 refineries with 65.7 million tonnes of crude oil processing capacity, which constitutes 31 percent of the domestic refining capacity. It has 11,000-plus km of crude oil, product and natural gas pipelines and a 44 percent fuel market share. Also, it is the second largest petrochemical firm in the country behind Reliance Industries.

It is expanding its footprint in oil and gas exploration, LNG, wind and solar power besides venturing into nuclear energy to become an integrated energy company.