Company officials indicated that exceptionally good financial performance during 1998-99 and expectations of even better results in the first half of the current fiscal could improve the prices of the IOC stock and the government should wait for such time before deciding on the timing of disinvestment.

Officials explained that lack of liquidity had hampered trading of the IOC stock and the present price was not a real indicator of the strength of thecompany's scrip.

Therefore, bonus issue could increase the floating stock by half to about five hundred and fifty lakh shares could be easily traded, they said adding that IOC staff and financial institutions were holding on about nine per cent of the company's stock. The government presently holds 81 per cent of 390 million shares while 10 per cent is owned by the Oil and Natural Gas Corporation (ONGC), and thus 91 per cent of the stock was least likely to be traded, officials said.

In case the government goes ahead with disinvestment in June or July, then the bonus issue during 1999-2000 would not be possible, they said.Once the petroleum ministry accepts the idea it would have to take the consent of the Finance ministry and than we could even moot a formal proposal at our board, sources said. Even IOC's global coordinators Goldman Sachs and Credit Suisse First Boston (CSFB) also did not appear to be in favour of disinvestment at this stage but a final view will be taken on the issue by the ministry'stask force on IOC's disinvestment shortly.