MOSCOW (MRC) -- India's federal cabinet Thursday approved a proposal to sell a 10% stake in state-run fuel retailer and energy company Indian Oil, Trade Minister Anand Sharma said, said Hydrocarbonprocessing.
Shares of the company closed at 195.75 rupees on the Bombay Stock Exchange on Thursday. At this price, the government will be able to raise 47.5 billion rupees (USD786 million) from the offering.
The government currently owns 78.92% of the country's largest fuel retailer.
The share sale is part of the government's program to raise 400 billion rupees in the fiscal year through March 2014 by selling shares in state-run companies.
This revenue is key to India's plan to narrow its fiscal deficit from 4.9% of gross domestic product in the last fiscal year. India's wide fiscal deficit has pushed up market borrowing by the government in recent years, stoking inflation and reducing credit availability for private borrowers.
As MRC wrote before, Indian Oil Corp (IOC) is planning a Rs 30,000 crore refinery on the west coast in Gujarat or Maharashtra as part of its plans to raise the refining capacity to 100 mln tons. IOC has seven refineries totalling 54.2 mln tons and a 11.5 mln ton subsidiary - Chennai Petroleum Corp Ltd (CPCL). It so far has no coastal refinery, impairing its ability to process cheaper difficult crude oils. IOC is looking for sites for the new unit in Gujarat and Maharashtra. The company has been offered land by Adani Group at Mundra in Gujarat as well as by Shapoorji Pallonji Group in Saurashtra.
Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
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