IOC truck

The Government of India has sold 10% of its stake in state-owned oil giant Indian Oil (IOC) for Rs93.79bn ($1.4bn).

The sale is in line with the country’s plan to raise up to $11bn in order to narrow its fiscal deficit to a targeted 3.9% of gross domestic product in 2015-16.

Around 68.57% stake in IOC is government owned. The oil giant accounts for nearly 30.5% of the country’s refining capacity with 65.7 million metric tons per annum (MMTPA).

Indicative price for each share of IOC had been set at Rs387 in the auction.

This divestment of IOC shares is the fourth for the country in this fiscal year and claimed to be the biggest, reports Press Trust of India.

"We are happy we have managed to get the stock which I think is intrinsically very good despite hugely adverse market conditions."

While the offered shares amounted to 242.8 million, the proposal had fetched requests for over 287.4 million shares from potential bidders.

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Indian Disinvestment Secretary Aradhana Johri was quoted by PTI as saying: "We are happy we have managed to get the stock which I think is intrinsically very good despite hugely adverse market conditions.

"The market conditions were exceedingly adverse it’s not been an easy but ultimately the issue has been over subscribed."

CitiGroup, Deutsche Equities, Nomura, JM Financial and Kotak Securities are the five bankers dealing with the divestment process.

To make up for the fiscal deficit, India has also sold its stakes in Rural Electrification for Rs16.1bn ($240m), Power Finance for Rs16bn ($239.5m), and Dredging Corporation of India for Rs1.45bn ($21.7m), reports Business Standard.

Image: Indian Oil truck. Photo: courtesy of John Hill / Wikipedia.