New Delhi: The government may cut its stake to below 51 percent in the Indian Oil Corporation, ET NOW reported quoting agencies. ET Now in a report said the government is looking to become a minority shareholder in the company. It currently hold 51.5 per cent in the oil major.
The stock closed 2.32 per cent higher at Rs 136.95 on BSE.
Central government has been on a divestment spree and is considering to cut stake in a number of companies. Indian Oil is the third oil company in which it is thinking of cutting stakes.State-owned oil and gas explorer ONGC is looking to sell its stake in recently-acquired refiner HPCL to a strategic investor, possibly an overseas oil company, to regain debt-free status of the company existing prior to the expensive buy. The plan for Hindustan Petroleum Corporation Ltd (HPCL) follows the government's go ahead to invite a strategic investor for Bharat Petroleum Corporation Ltd (BPCL) where the Centre owns 53 per cent stake. The divestment is important from the fiscal math perspective. India's fiscal deficit at the halfway mark in 2019-20 stood at 92.6 per cent of budgeted estimates, lower than 95.3 per cent in April-September, 2018-19, helped by transfers from the RBI. With muted tax revenues, the government will have to undertake spending cuts and divest to achieve FY20 fiscal target of 3.3 per cent of GDP, say economists.
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