IOC sold 27.41 million shares or 1.92 per cent of ONGC, for Rs 1,345 per share in a sale managed by Morgan Stanley and Citigroup Inc, company sources said.
The company offered ONGC shares in the price band of Rs 1,330 to 1,399 per share. The shares were picked up by institutional investors.
Sources said IOC was losing Rs 80 crore (Rs 800 million) everyday on sale of petrol, diesel, LPG and kerosene below the production cost and sale of shares in ONGC was to partly meet the working capital requirement.
State-run Indian refiners have been unable to raise government-capped retail fuel prices since September last year, despite the surge in crude oil prices.
The non-revision of retail prices of petroleum products by the government is expected to lead to under-recoveries of an estimated Rs 57,000 crore (Rs 570 billion) by oil marketing companies -- IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp in 2006-07.
The three together lost Rs 4,722 crore (Rs 47.22 billion) in revenues in April.
In 2005-06, the OMCs' gross under-recoveries amounted to Rs 39,600 crore (Rs 396 billion).
Petrol in Delhi is being sold at a loss of Rs 5.66 per litre, diesel at Rs 7.64 per litre, kerosene at Rs 14.29 a litre and domestic LPG at a loss of Rs 195.10 per cylinder.
IOC had on March 2 sold half of its 4.8 per cent stake in gas utility GAIL (India) Ltd for Rs 561 crore (Rs 5.61 billion) to repay part of its debt and fund expansion.
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