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Indian Oil Stake Sale On ‘Black Monday’ Nets Rs 9,379 Crore To Govt

India will raise about Rs 9,379 crore ($1.4 billion) from selling a stake in state-run refiner and fuel retailer Indian Oil Corp, the government said on Monday, even as a global stock market rout raised concerns about future offerings. New Delhi is seeking to raise as much as $11 billion (Rs 69,500 crore) by selling stakes in state-run companies this fiscal year, crucial to narrowing the fiscal deficit to a planned 3.9 percent of gross domestic product in 2015/16.3-1 Together with three other disinvestments since April, the government has mopped up over Rs 12,600 crore, or a little less than one-fifth of its ambitious target. The sale of a 10 percent stake in Indian Oil came on the day India’s stock market plunged nearly 6 percent, its biggest daily slide in 6-1/2 years, as steep falls in Chinese equities sparked widespread panic in global markets.3-2The issue was subscribed 1.18 times, led by funds who bid for 43 percent more shares than was on offer for them. The portion reserved for individual investors saw demand for less than one fifth of the shares on offer, meaning the remainder will be sold to funds. “Yes, the market is getting more and more difficult. We do have to look for opportunity,” said Aradhana Johri, secretary at the Indian government’s Department of Disinvestment, when asked about the government’s future share sales.

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