ONGC, IOC may tap market with follow-on share sales soon: report

State-run oil explorer Oil and Natural Gas Corporation (ONGC) and oil refiner and marketer Indian Oil Corporation (IOC) are expected to tap the market with follow-on share sales.

The plans so far been kept in the proposal stage, is likely to become operational following the government's move to decontrol fuel prices, the Economic Times newspaper said in a report.

"The government shareholding holding in both IOC and ONGC is substantial. There can be discussions with the department of disinvestment on a possible course of action. We will take this up as we go along during the year," the report quoted oil secretary S Sundereshan as saying.
According to the report, the decision to free prices of fuel at one go, has considerably brightened the prospects of these companies when they come to the stock market. As of now, upstream companies like ONGC sell crude oil to state-owned oil refining and marketing firms like IOC, HPCL and BPCL, who in turn sell petrol and diesel at government set prices.

Both oil producers and fuel marketers suffer losses on sales, according to the report.

IOC had indicated earlier that it was looking for clarity on oil pricing prior to tapping the market, the report said.

Yesterday, shares of ONGC were up 6.35 per cent at Rs1,264 on the Bombay Stock Exchange, while IOC shares were up 10.39 per cent at Rs377.30, the report said.