A retail issue, likely to comprise a small fragment of the 78.9 million IOC shares that will be offered to institutional investors at home and overseas, will follow the book-building process. The GDR issue will be listed on the London Stock Exchange (LSE) and the placement of Indian Oil stock with institutional investors in India will be on the Bomaby Stock Exchange.

The Union Cabinet had approved divestment of 10 per cent of IOC's total equity capital, which stands at Rs 789 crore after the company made a bonus issue in the ratio of 1: 1 last year. The government owns 82 per cent, Rs 646.98 crore of that share capital.

The 78.9 million shares to be offered to institutional and subsequently to retail investors will comprise 12.19 per cent of the government shareholding. The total disinvestment should bring down the government stake in IOC to 69.81 per cent and mop up more than Rs 2,000 crore at current stock prices.

The task force on IOC disinvestment met last week and an investors' analysts meet is scheduled in the week ahead. The exercise for the offloading of 12.19 per cent government stake is on in full swing, but market sources say the institutional offer would only come after the Union Budget.

Merchant bankers and other members of the task force working on the Indian Oil disinvestment agree that the roadshows would prove more attractive if they included a Budgetary update. The petroleum refining and marketing industry at home are looking forward to tariff reliefs, like five per cent to 10 per cent cut in import duty on crude oil.

A roadshow before the Budget would have raised queries about the prospects of petroleum companies in India, prompting the Union government to time the issue in early March. The retail issue to small investors at home will follow the institutional offer, in keeping with the recommendations of the Disinvestment Commission.

The retail issue could be as small as a per cent of the total shares on offer, or roughly 7.8 lakh shares. It could be bigger if the common book-building at home and overseas did not yield the desired price. The Indian Oil, which shot up to Rs 352 a share on BSE soon after the company issued bonus shares in the ratio of 1:1 is now trading at Rs 270 a share.