Government-owned oil majors Indian Oil Corp Ltd and Bharat Petroleum Corp Ltd have said that they have received the requisite permissions from their respective boards of directors to purchase equity stakes in the oil exploration firm Oil India Ltd (OIL).  

A statement issued by IOC said that the company has already informed the Bombay Stock Exchange (BSE) that its board has approved the company’s move to buy 10.7 million equity shares from the Government of India. In other words, 10.7 million equity shares would mean five percent of IOL’s pre-issued paid up capital.

On the other hand, the BPCL board too has given its nod to acquire 5.3 million OIL shares. The company will buy government's 2.5% stake in Oil India. Earlier, the Union Cabinet had sanctioned the company to sell stake in Bharat-Shell to Shell for Rs 152 crore.

The government has also approved a 10 percent initial public offering (IPO) in Oil India as well as a preferential allotment of 10 percent of the OIL to the three government-run refiners. Although, the third company Hindustan Petroleum Corp too has been permitted to buy 2.5 percent stake in OIL, its board of directors is yet to approve the purchase.

Currently, the Union government owns 98.17 percent shares in the company and the remaining is with the employees. Once the IPO is over, the government's stake will drop down to 78.43 percent. The government is also divesting 10 percent of its share holding in the company to the general public.
According to reports, the transaction of these stakes would be completed within two days after the issue price of the public offer is fixed through the book building method and approved by the board of directors of OIL.
 

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