The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, approved the disinvestment of 5 percent paid-up capital in Oil & Natural Gas Corporation Ltd. (ONGC) out of the Government of India’s shareholding of 68.94 percent.

This would further broad base the shareholding of the Company and would enhance disinvestment receipts.

Background:

ONGC is a "Maharatna" public sector undertaking under the administrative control of the Ministry of Petroleum & Natural Gas. It was established in August, 1956 to plan, promote, organize and implement programmes for development of petroleum resources and the production and sale of petroleum products by it.

The paid-up equity capital of the company, as on 31st March, 2014 is ₹ 4277 crore. The President of India holds 68.94 percent of the paid up capital in ONGC. In accordance with the Government of India`s disinvestment policy, the Government has decided to disinvest 5 percent paid-up equity in ONGC, out of its equity capital holding of 68.94 percent through Offer for Sale (OFS) method in the domestic market as per Securities and Exchange Borad of India (SEBI) Rules and Regulations. After this disinvestment, the Government of India’s shareholding in the company would come down to 63.94 percent.

Disinvestment of government shareholding in ONGC approved via Offer for Sale, broadening public ownership under SEBI rules. The Cabinet Committee on Economic Affairs approved a disinvestment of five percent of paid up equity in ONGC to be executed from the Government of India's holding through the Offer for Sale mechanism in the domestic market, in accordance with the Government's disinvestment policy and Securities and Exchange Board of India rules, with the effect of broadening the company's shareholding base and reducing the Government's stake by the disinvested portion.