The finance ministry has proposed an initial public offering for ONGC Videsh (OVL), a wholly owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC), said people aware of the matter.

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The finance ministry has written to the oil and petroleum ministry department on this pointing that the IPO will add value to the state-run oil and natural gas company, sources told CNBC-TV18.

ONGC Videsh has a stake in 41 oil and gas projects in 20 countries.

The letter, sent last week, did not state how much of ONGC should be offered to outside investors.

The letter said any state-owned firm with a positive net worth and no accumulated loss should be listed to unlock value.

The listing would help the government meet its divestment targets and make up for a failed plan earlier this year to sell a stake in national carrier Air India.

The Narendra Modi-led government has a target to raise a record $14.25 billion from the sale of state assets in the current fiscal year ending in March 2019.

India holds a 67.45 percent stake in ONGC Videsh's parent ONGC and gains from a listing could be transferred to the government via a special dividend.

ONGC Videsh, 100 percent owned by ONGC, suffered losses during the low crude price environment between 2014 and 2017 but its earnings have since recovered.

(With inputs Reuters)

First Published:Aug 20, 2018 1:04 PM IST