Going ahead with its disinvestment plan of the first two PSUs, the government has decided that the initial public offer (IPO) of Oil India will hit the market on September 7, 2009 by which it is planning to disinvest roughly 21% of stake.

Picking up information from a senior official in finance ministry who did not wish to be named, out of the 21% stake offered, the government will divest 10% of its stake and another 11% will be available through fresh equity. The fund raised through government stake sale will go to National Investment Fund which will be used for social security schemes and fund from fresh equity sale will be used for expansionary plans of the PSU.

The govt’s disinvestment plan kickstarts with the IPO of NHPC which will open on August 7. The government is planning to raise a substantial amount as the market appears favourable.

After disappointing markets with no big ticket announcement on disinvestment, finance ministry is now chalking out a road map for disinvestment by asking over 15 ministries to provide a list of probable candidates of public sector undertaking in which government can dilute its small stake while maintaining majority share above 51% within ten days.

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