Govt may delay IOC divestment until rupee stabalises

Government is likely to delay divestment of stake in Indian Oil Corp until rupee volatility eases, reports CNBC-TV18's Aakansha Sethi quoting sources. 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. The stock fell nearly 5 percent following the news report.

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. Did you read: Cabinet approval likely for IOC disinvestment next week
This week is going to be full of these public sector undertakings (PSU) issues which have to meet the Sebi's 10 percent mandatory requirements. On Wednesday, National Fertilizers (NFL) offer for sale (OFS) issue worth 7.62 percent will come up. On July 31, the government will take a decision on the Neyveli Lignite Institutional Placement Programme (IPP) which may take place next week.
On August 02, India Tourism Development Corporation (ITDC) and the State Trading Corporation (STC) issues are lined up. Now for those companies which are loss-making the government is going to set up an special purpose vehicle (SPV). This SPV will buy shares of the loss-making PSUs from the government at a nominal rate of about Rs 1, as they cannot be divested in the open market.
Now onto the government's main divestment agenda, there is a target of Rs 40,000 crore and some of the main candidates are Coal India, Indian Oil as well as National Hydroelectric Power Corporation (NHPC).
Coal India’s unions are against 10 percent divestment, which needs to be resolved by the government. So as far as the government’s main divestment agenda is concerned, things look a little bit on weak wicket now. The Finance Ministry is working on getting together Coal India and Indian Oil issues, which may take place by October this year.