The empowered group of ministers headed by finance minister Pranab Mukherjee today decided to take the auction route for sale of stake in Navratna public sector undertakings Oil and Natural Gas Corporation (ONGC) and Bharat Heavy Electricals Ltd (BHEL).
The government will use the new window opened by market regulator Securities and Exchange Board of India (SEBI) to sell PSU shares through auction, divestment secretary Haleem Khan said today.
SEBI had, last month, announced that shareholders of the country's top 100 companies by market value could raise funds by auctioning their stakes through stock exchanges.
SEBI has set the minimum offer size at 1 per cent of the company's paid-up capital and the minimum amount to be raised at Rs25 crore.
While the stake sale is expected to fetch fund-starved government about Rs14,500 crore, the divestment department is likely to miss the current year divestment target of Rs40,000 crore.
The government is expected to sell 5 per cent stake in ONGC, India's largest oil explorer, to raise about Rs12,000 crore through the auction route.