The Finance Ministry wants to sell 10 per cent of the government's stake in Indian Oil Corp (IOC) by end of the month in a bid to achieve its Rs 40,000 crore disinvestment target.
So far, the government has raised about Rs 1,325 crore from stake sales in six companies.
"We want to push the IOC stake sale first, within November itself. This will pave the way for disinvestment of other oil sector PSUs like Engineers India," a senior Finance Ministry official said on Sunday.
IOC shares closed at Rs 213.20 on the Bombay Stock Exchange on Friday. They have fallen 43 per cent from the 52-week peak of Rs 375 on January 18.
At the current price, the sale of 19.16 crore IOC shares, equivalent to 10 per cent of the government's holding in the company, would fetch more than Rs 4,000 crore, which is 10 per cent of this financial year's disinvestment target.
Last month, the Department of Disinvestment put off overseas roadshows for the IOC stake sale following opposition from the company and the Petroleum Ministry, which cited poor market conditions. The roadshows were planned in London, US, Singapore, Hong Kong and Dubai.
Citibank, HSBC and UBS Securities are among the five merchant bankers selected to manage the oil retailer's share sale.
IOC Chairman RS Butola had written to the Oil Ministry in September, saying, "Current share price of IOC, already undervalued, may not fetch the fair value in the prevailing uncertain environment and investors in all probability are likely to factor in huge discount in their assessment of share price."
A share sale under present conditions could fetch a low price and would further dent IOC's efforts to raise loans for crude oil imports.
The government held a 78.92 per cent stake in the country's largest oil refiner as of September 30.
IOC posted an 82.5 per cent drop in net profit to Rs 1,683.92 crore for the July-September quarter after losses from foreign exchange and sales of diesel, cooking gas and kerosene below cost.
The government plans to sell 10 per cent in Engineers India. At the current market price of Rs 175.10, the sale of 3.36 crore EIL shares would fetch about Rs 600 crore.