A decision to this affect was taken on Monday by a Group of Ministers headed by the Finance Minister, Mr Pranab Mukherjee.

Official sources said the IPO will open on September 7 and close on September 10. Oil India is likely to be listed on September 29.

OIL, which produces 3.5 million tonne of oil annually, will offer fresh equity of 2.64 crore shares or 11 per cent, while the Government will put on offer 10 per cent of its stake in OIL to the public sector refining-cum-marketing companies — Indian Oil Corporation, HPCL and BPCL.

The IPO offer coupled with direct divestment of government stake to public sector oil refining and marketing companies is expected to raise about Rs 5,000 crore (at the ceiling rate), official sources said. The IPO will generate Rs 2,772 crore for the company and direct stake sale is expected to get the Government about Rs 2,247 crore at the ceiling rate, official sources said.

Subsequent to the IPO and disinvestment, the Government’s stake in OIL will decrease from 98.13 per cent to 78.43 per cent.

From the direct disinvestment of 10 per cent in Oil India, the Government will sell about 5 per cent stake to IOC and about 2.5 per cent each to HPCL and BPCL.