The Hindu Business Line : Cabinet panel may discuss Oil India's IPO plan soon

Kolkata April 9 The Cabinet Committee on Economic Affairs (CCEA) may discuss a proposal for initial public offer of Oil India Ltd (OIL) by the end of this month or early next month. This may coincide with the end of the Assembly elections in Uttar Pradesh.

The Union Ministry for Petroleum and Natural Gas was already working on a draft proposal for 10 per cent market float by issue of fresh equity shares of OIL. The Centre currently owns about 98 per cent equity in the unlisted company.

The upstream oil and gas PSU is hopeful of raising over Rs 1,500 crore through the IPO. The issue proceeds are expected to part finance OIL's exploration and production activities for the next five years.

"We are expecting the proposal to be placed before the Cabinet Committee end of this month once the UP elections are over," a source close to the development told Business Line.

Though responses were not readily available from the Union Petroleum and Natural Gas Ministry on the issue, the Petroleum Minister, Mr Murli Deora, had told Business Line in February that the proposal was "under consideration" but yet to be finalised.

According to sources, OIL is planning to invest Rs 15,000 crore in the next five years in exploration and production sector in India and abroad and another Rs 2,000 crore in refining. The board of directors of OIL recently approved a proposal to form a joint venture company with IndianOil for participation in overseas E&P projects.