India defers Indian Oil sale

Finance Minister Yashwant Sinha said the government has delayed the sale of equity in Indian Oil after the company's share price dropped to a year's low. The planned sale of a 5.0 % stake in the country's largest oil refiner and fuel supplier was postponed to the next financial year, beginning April 1, Sinha told parliament.
He said the cabinet panel on disinvestment, headed by Prime Minister Atal Behari Vajpayee, took the decision after the company's share price dropped to a year low of 276 rupees.
Merchant bankers managing the proposed issue informed the government that Indian Oil shares would fetch a price well below 270 rupees, earning it just 2.5 bn rupees from the sell-off, less than half the targeted figure.

At the same time, the cabinet cleared a proposal to privatise the state-owned Bharat Aluminium by selling 51 % of its equity.
The government has already appointed Jardine Fleming as its global advisor to find a strategic partner for the aluminium firm.

Sinha said the Indian Oil postponement would create "a minor dent" in the government's sell-off target set for the fiscal year ending March 31.
"This will have little impact on government's efforts to meet the disinvestment target this year," he said.
Sinha said the government will launch a "large-scale" disinvestment programme in the next fiscal year starting April 1.
"We will go in for large-scale strategic sale of government's shares in public sector units.
"We will not like to lose any time on implementation of the decisions which the government has taken. This is the first time we have talked about privatisation and we are not going to shy away from it," Sinha said.
He said the government had fixed a share sell-off target of $ 2.4 bn in the next fiscal year.

Meanwhile, members of the autonomous Disinvestment Commission threatened to quit if the panel's recommendations on privatisation of state-owned units are not taken seriously.
"We are hoping that cabinet committee on disinvestment will take a positive approach towards concerns of the commission within the next few weeks. Then we will decide to continue or quit," panel chief G.V. Ramakrishna said.
Panel members have said the government was ignoring its suggestions despite a cabinet decision to take the commission into confidence in the privatisation programme.