ONGC tumbles on upcoming divestment plan from government

The government is looking to divest about 5 per cent stake in public service company, Oil and Natural Gas Corporation (ONGC). According to reports, the government may sell stake on its disinvestment target of Rs 56500 crore.

As of June 2016, the government held 68.93 per cent stake in ONGC. On the company’s current market price of Rs 247.50, the proposed share sale by the government would fetch over Rs 10500 crore to the government.

The government has so far raised Rs 3183 core in FY17 via disinvestments in NHPC and the sale of shares in Indian Oil and NTPC to their employees. More than a dozen companies have been asked to buy- back shares to the extent they can, by an amount equivalent to 25 per cent of the aggregate of their fully paid-up share capital and free reserves.

The share price of ONGC has declined by 1.6 per cent on bourses in early trades; and closed at Rs 247.5 on an intraday basis.