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LIC shelled out Rs 12,000 crore to bail out ONGC

LIC shelled out Rs 12,000 crore to bail out ONGC

State-owned LIC saved the ONGC issue, first-ever stake sale of government equity through the auction route, by pumping in over Rs 12,000 crore and picking up 95 per cent of the total shares put on the block.

State-owned LIC saved the ONGC issue , first-ever stake sale of government equity through the auction route, by pumping in over Rs 12,000 crore and picking up 95 per cent of the total shares put on the block.

The auction process, which evoked criticism from market players, has helped the government in getting around Rs 14,000 crore from disinvestments this fiscal against the target of Rs 40,000 crore.

The government, however, expressed satisfaction over the auction process and said it would consider more stake sale through the same route after analysing the technical glitches that marred ONGC stake sale.

Life Insurance Corporation (LIC), according to official sources, picked up 40 crore shares, or 95 per cent of the ONGC shares, sold through the auction route on Thusday fetching the government a total of Rs 12,766.75 crore.

There was no participation from foreign institutional investors and very little from retail investors, sources said.

About 42 crore ONGC shares, representing a little less than 5 per cent of government stake in the oil major, were sold at an average price of Rs 303.67 a piece.

Although the finance ministry has asked capital market regulator Sebi to look into the glitches, BSE and NSE said that the system operated normally.

During the ONGC auction, the bids could not be uploaded because of technical reasons and thereby creating confusion about the outcome of the stake sale process till late evening.

The issue was finally resolved after Sebi's intervention and the Finance Ministry said that the issue was subscribed 98.3 per cent.

Finance Minister Pranab Mukherjee said the government will study the auction process before going ahead with stake sale of other companies.

"This (ONGC auction) is the first case. We shall have to analyse and then make assessment," he said.