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This January when the government approved a 10 Percent stake sale in the state-run Indian Oil Corporation Limited (IOCL), directors at the Oil and Natural Gas Corporation (ONGC) cringed. ONGC and Oil Indian knew, in a bad market, the onus to meet the government's aim to narrow its budget deficit would fall on them.

In the past nine months for this fiscal, ONGC has borne subsidy burden to the tune INR 40,182 crore and paid out a total dividend of INR 7,913.83 crore of which INR 5,478.74 crore has gone to the government's kitty. Besides, earlier this month, IOCL stake sale made ONGC cough up INR 2,670 crore.

ONGC and Oil India bought 5 Percent each of the Government stake in IOCL, yielding INR 5,340 crore to the government. Post the deal, the Centre's shareholding in IOC has come down to 68.92 Percent while ONGC's has gone up to 13.77 Percent and Oil India's at 5 Percent. "We had protested. But to no avail. We know public sector companies, more so ONGC, is the government's unsaid bank. We bear the subsidy burden and pay dividends ," said an ONGC board member on the condition of anonymity.

The government being the promoter with 69.23 Percent shares has got INR 48,330 crore in non-tax dole so far this year from ONGC. Though the major portion of this is subsidy share which goes to the oil marketing companies, industry observers said the government through this has passed on its subsidy load to ONGC. Among the other shareholders of ONGC are 6.74 Percent held by FIIs, 10.54 Percent is held by domestic institutional investors and 13.49 Percent by others.

"In fact, the government has on various occasions, wanted more dividend. But the board has turned town its requests," the board member added. ONGC's market capitalisation as on today is INR 2,74,246 crore. It is the highest valued and the highest profit making government of India company. "And thus probably one of the favourites when its comes to milking money," said an ONGC board member.

The outflow of cash from the company has come at the cost of not only its investment plans but also returns to the employees. "Thanks to the increase in subsidy pay out performance linked pay (bonus in other words) to us has been reduced drastically this year. This, when we have all met our production targets. In some cases, our officers have lost bonus to the tune of INR 1 lakh. But the government's payout is ensured," rues a senior ONGC engineer. In the financial year ended 31.03.2013, the ONGC Group had produced 58.7 million tonne of oil and oil equivalent gas. It had clocked a turnover of INR 165,849 crore and profit after tax of INR 24,220 Crore.

Source-On Request