New Delhi : The government has asked ONGC to list its overseas investment arm, ONGC Videsh (OVL) on stock exchanges and transfer proceeds to it in the form of a special dividend, helping meet its disinvestment target, according to a letter written by DIPAM.
According to a letter the Department of Investment and Public Asset Management (DIPAM) wrote to ONGC management last week, the listing of OVL would help unlock value by improving its corporate governance and efficiency.
After failing to find a buyer for Air India, DIPAM is again looking at ONGC to meet the Rs 80,000 crore revenue mobilisation target set out for it in the Budget for 2018-19 from the sale of government stake in PSUs. As on July 5, 2018, the government has realised Rs 9,219.91 crore as disinvestment proceeds against the budgetary target of Rs 80,000 crore, according to DIPAM. OVL, which is 100 per cent owned by ONGC, has so far invested Rs 1.5 lakh crore ($28.36 billion) in 41 projects it has across 20 countries.
In the letter, DIPAM said PSUs with a positive network and no accumulated losses should be listed to unlock value.
It, however, did not state how much stake in OVL should be sold for its listing.
Market regulator Sebi calls for a minimum 25 per cent public float for a listed company. Officials said, proceeds of the listing of OVL would accrue to its parent ONGC but the government would seek a special dividend to reap that.
The government owns 67.45 per cent in ONGC. If ONGC were to declare entire proceeds of OVL listing as a special dividend, the government would get 67.45 per cent of it.
The government had in 2015 as well asked ONGC to list OVL. But the state-owned firm had at that time told the government that it was not the right time to list as oil prices were subdued and the company would not get the right value.
Oil prices have since rebounded and the government is looking to cash in on that.
Under its portfolio, OVL has reserves of 711 million tonnes of oil and oil equivalent natural gas.
In 2017-18, it produced 9.35 million tonnes of crude oil, up from 8.43 million tonnes in the previous year. Together with natural gas, the output was 14.16 million tonnes of oil equivalent, up from 12.80 million tonnes in the previous year.
