The Government stock will be transferred to the companies through the National Securities Depository Limited (NSDL), which already has custody of the disinvested equity in most oil companies. The share transfer in the demat form will result in a saving of almost Rs 22.5 crore for ONGC, Indian Oil and Gail in the form of stamp duty.

The real intention for dematerialising the Government stock was to effect a quick registration of the shares, say sources involved with the process. The three national oil companies have already paid up for the government stock they are buying into each other, but the shares are yet to be registered. The formality of registering the shares willenable the oil companies to swap directors on each other's board and so set in motion the strategic alliance intended through the equity swaps. Indian Oil and ONGC will buy 10 per cent stake into each other and 5 per cent Government equity in Gail. The Gas Authority of India will pick up a 2.5 per cent stake in gas producer, ONGC. The ONGC has paid Rs 1,265.33 crore for a 10 per cent stake in Indian Oil and Rs 235 crore for a 5 per cent stake in Gail. Indian Oil has paid the Government close to Rs 2,470 crore for 10 per cent of ONGC stock and 5 per cent of Gail shares. The 2.5 per cent ONGC equity that Gail will pick up will cost the company roughly Rs 530 crore.

The stamp duty payable for a physical transfer of shares is a 0.50 per cent, while transfer of demat shares is exempted from stamp duty. The share transfer in the demat form should save Indian Oil nearly Rs 12.35 crore in stamp duty for the Rs 2,470 crore transaction.

The saving in stamp duty for ONGC will be Rs 7.5 crore for the Rs 1,505 croretransaction. The Gas Authority of India should gain Rs 2.65 crore because of the demat share transaction, in the form of savings on stamp duty. It may be recalled that the private placement of three crore Gail shares with institutional investors was also in the demat form. Sources in government point out that gradually all ``listed companies have to be moved into the demat mode.''

In the oil sector alone, almost nine companies including joint sector entities like the Mangalore Refinery and Petrochemicals Limited (MRPL) have NSDL connectivity. The Centre is in the process of lodging the stocks disinvested in Indian Oil, Gail and ONGC with the National Securities Depository Ltd (NSDL) for dematerialisation.

Once the shares are dematerialised, they would be transferred electronically and remain within the depository system. As the shares would be transferred in the depository, the transfer would be instant and devoid of the risks of the delays usual in the physical transfer of shares. Transfering shares onthe Delhi Stock Exchange takes almost a month, mused an industry source. The government has taken a view that all disinvestment by it would be only in the demat mode.