Govt shortlists 5 merchant bankers for IOC stake sale
New Delhi   14-Aug-2015

The Government has finalised five merchant bankers for disinvestment of 10 per cent stake in Indian Oil Corporation (IOC), which could fetch the exchequer about Rs9,500 crore, a senior IOC official said on Thursday.

“Finance Ministry has shortlisted five merchant bankers, including Citibank and Nomura, for disinvestment of 10 per cent stake in Indian Oil Corporation (IOC). Besides, others merchant bankers who have been shortlisted include Deutsche Bank, Kotak Bank and JM Financial,” the official said at the sidelines of an event here.

As many as 10 merchant bankers had made a beeline for managing IOC stake sale and the disinvestment department has shortlisted five from them.

At present, the Government holds 68.57 per cent stake in IOC. At the current market price, sale of 24.27 crore shares, or 10 per cent stake, would fetch the Government around Rs9,500 crore. The stake sale would also help disinvestment department to inch towards the PSU stake sale target of Rs69,500 crore set for this fiscal.

Meanwhile, the India's biggest oil major announced its first quarter earnings on Thursday. The company recorded 2.5-fold jump in its net profit at Rs6,435.70 crore or Rs26.51 per share, in April-June quarter of the current fiscal, compared with Rs2,522.94 crore, or Rs10.39 a share, in the year-ago period. The variation of its profit is mainly due to refining margin which rose to 7-year high.

“Variation in profit is majorly due to higher refinery and petrochemical margins,” IOC Chairman B Ashok told reporters here. The company earned $10.77 on turning every barrel of crude oil into fuel in the first quarter of 2015-16, compared with a gross refining margin (GRM) of $2.25 per barrel.

“GRM are the highest since June quarter of 2008-09 fiscal when we clocked $16.81 per barrel margin,” he added.

Refinery throughout was 5.5 per cent higher at 13.568 million tonnes. “Our refinery margin in the quarter was Rs6,521 crore as compared to Rs705 crore in the corresponding period of last financial year. Petochem margin rose to Rs1,875 crore from Rs719 crore,” he said adding that the GRM was higher because of inventory gain of $4.78 per barrel.

Ashok said GRM were high because of inventory gain as well as better operational performance. There was a total of Rs3,218 crore of inventory gain, resulting from valuation of oil rising between the time it is bought, processed and sold. “There was an inventory gain of Rs2,395 crore on crude oil in the first quarter as compared to an inventory loss of Rs426 crore a year ago.”