ONGC-HPCL Deal Won’t Be ‘Rushed Through’, Says Divestment Secretary
The government’s strategic divestment is proceeding as per mandate and it won’t rush through Air India stake sale.
The government’s strategic divestment is proceeding as per mandate and it won’t rush through stake sale proposals including Air India Ltd., Neeraj Kumar Gupta, secretary of the Department of Investment and Public Asset Management told BloombergQuint.
The ONGC-HPCL deal will take place only after meticulous planning and without being ‘rushed through’, Gupta said, adding that the department “can’t set a timeline” for when the merger would be completed. Post the merger ONGC will become the first fully vertically integrated company in India, he added.
The Union Cabinet in July had approved the sale of its 51.11 percent in the third largest oil retailer and refiner to ONGC as part of its effort to create an integrated energy behemoth and meet the hefty Rs 72,500-crore selloff target it had budgeted for this fiscal. The ONGC chairman recently said the company hopes to complete the acquisition of HPCL by March next year.
Air India Divestment
Divestment of state-owned carrier Air India is progressing as per the mandate given by the government, Gupta said.
The Cabinet Committee on Economic Affairs had on June 28 granted its in-principle approval for considering strategic disinvestment of Air India and five of its subsidiaries. Though the government has not yet set any timeline for divesting its stake in the loss-making flag carrier, the whole process is expected to be completed in 12 to 18 months’ time, wire agency PTI said in a recent report.
The Bharat-22 Exchange Traded Fund, the government’s second low cost investment alternative after CPFSE ETF, has received positive response from retail investors and pension funds, said Gupta.
The anchor book was subscribed six times, he said.
The ETF, which will be managed by ICICI Prudential AMC, is a diversified portfolio of 22 blue chip stocks. The state-owned companies that are part of the ETF are ONGC, IOC, SBI, BPCL, Coal India and Nalco. Other PSUs on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Three public sector banks – SBI, Indian Bank and Bank of Baroda – also feature in the Bharat-22 index.