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Cabinet approves 10% stake sale in Indian Oil Corp.

India’s Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, approved the disinvestment department’s plan to sell a 10% stake in Indian Oil Corp. (IOC) on 13 May. At current share prices, the sale could fetch INR 8,120 crore (USD 1.2 billion).

The disinvestment department’s new strategy is to build a pipeline of companies with all approvals in place. The companies will be sold when market conditions are favourable, in contrast with the earlier practice of seeking Cabinet and regulatory approvals in the first half of the year and selling stakes in the second half.

According to the Business Standard, Disinvestment Secretary Aradhana Johri has said that the stake-sale pipeline being prepared was for stakes totalling Rs 30,000 crore (USD 4.7 billion).

Oil Marketing Companies (OMCs), such as IOC, have benefited in the past few months from falling crude oil prices.  Additionally, the recent diesel fuel price deregulation has reduced its underrecoveries.

The last time a stake sale in IOC was made was in March 2014.