After a weak opening, the scrip of the country's largest oil firm lost 2.39 per cent to Rs 238.25 on the BSE Sensex.
At the NSE Nifty, the stock fell 2.49 per cent to Rs 238.40.
Indian Oil Corp had yesterday reported a net loss of Rs 961.45 crore in the December quarter after the government paid less than half of the due oil subsidy, negating gains made from foreign exchange.
IOC had posted a net profit of Rs 3,331.96 crore in the same period a year ago.
The company posted losses "mainly on account of higher absorption of under recoveries on sale of sensitive petroleum products," IOC Chairman R S Butola had said.
Meanwhile, the government is likely to sell its 10 per cent stake in IOC through an off-market deal to state-owned * Oil & Natural Gas Corpn and OIL at a discount of 10 per cent over the current market price.