Shares of Indian Oil Corporation (IOCL) erased all losses to trade higher by the closing hour after reports surfaced that the government is looking to become a minority shareholder in the company. As of September 30, 2019, the government had 51.50% stake in IOCL.
Shares of Indian Oil that were trading near the day's low of Rs 131.40 on the BSE climbed 4.67% by the closing hour to the day's high of Rs 140.1. Indian Oil stock trades higher than 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages.
Volume-wise, 10 lakh and 158 lakh shares traded on the BSE and NSE counters, both above the 5,10 and 30-day average volume traded.
The central government is reportedly working on a proposal to reduce its stake in the state-owned oil marketing company to below 51%.
The government has been on a divestment spree and recently set a disinvestment target of Rs 1.05 lakh crore for FY2019-20, in order to bridge the fiscal deficit gap in the current financial year after it announced a massive cut in corporate tax rates in September.
India's fiscal deficit stood at 92.6% of budgeted estimates in September 2019, lower than 95.3% during the same period last year.
With just five months left to achieve the target, the government has been keenly considering to cut stake in a number of companies.
Shares of Indian oil closed 2.32% or 3.10 points higher at Rs 136.95 on the BSE.