Secretary for surface transport R Vasudevan confirmed the development. "The companies have decided that it would not be in their interest to pick up a stake in SCI. We are now planning to rope in an Indian shipping company to pick up the stake," he told The Financial Express.

SCI chairman and managing director PK Srivastava said: "It does not make sense for the companies to invest in SCI as their core competency does not lie in running a shipping company. It would be cheaper to hire an outside agency to transport oil."

Earlier, the surface transport ministry was "actively" considering the Disinvestment Commission's proposal to offload the Centre's 40 per cent stake in SCI to the oil majors.

The quantum of stakes to be picked up by the companies was to be linked to their size of net profits, sources close to the ministry had said.

SCI's crude-tanker tonnage constitutes about 60 per cent of the total tonnage of the company's fleet and it transports about 70 per cent of the imports of crude into the country. The dry bulk and specialised carrier tonnage constitutes about 30 per cent of the total tonnage of 57.6 million tonnes.

Post-divestment, the Centre's stake in the corporation will come down from 80 per cent to 40 per cent. The Government had earlier divested 20 per cent of its equity to Unit Trust of India, Life Insurance Corporation, General Insurance Corporation, among others.

SCI, sources say, may also make an equity offer in the domestic market to institutional investors through book building. In the next stage, shares may be sold to small investors and employees through a retail offering at a 10 per cent discount to the wholesale price. The company also plans to tap the overseas market at a later stage.