DIPAM, Oil Ministry to discuss OVL listing soon

NEW DELHI: The government wants Oil and Natural Gas Corp (ONGC) to list its overseas arm ONGC Videsh (OVL).

The Department of Investment and Public Asset Management (DIPAM) has recently written to the oil ministry on the matter and the officials at the two ministries are set to discuss this early next month, according to officials.

This is not the first occasion when DIPAM is pushing for listing ONGC’s profitable arm, which has interests in 41projects across 20 countries. At least twice in the last five years, ONGC has strongly resisted the Centre on taking its subsidiary public.

DIPAM’s idea is that all profitable public sector enterprises should be listed as it would help boost efficiency and corporate governance at these firms. The government may not directly gain from a public offer by ONGC Videsh since it is a fully-owned subsidiary of ONGC. But the government can use this fund raising by OVL to demand a bigger dividend from parent ONGC.

The second option could be to just list OVL without a share sale. In this case, OVL would have a shareholding pattern that would mirror that of ONGC, which would then give the government an opportunity to directly sell some stake in OVL.

ONGC Videsh reported a profit of Rs 1,682 crore on a revenue of Rs 14,632 crore in 2018-19. Profit and revenue jumped 71% and 40%, respectively, from a year earlier. It produced 14.8 million metric tonnes of oil equivalent in 2018-19.


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