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After opening the day in green, share markets in India witnessed choppy trades and are currently trading marginally below the dotted line. Sectoral indices are trading on a mixed note with stocks in the realty sector and stocks in the metal sector leading the gains. Stocks in the banking sector are trading in red.

The BSE Sensex is trading down by 40 points (down 0.1%), and the NSE Nifty is trading down by 11 points (down 0.1%). Meanwhile, the BSE Mid Cap index is trading up by 0.6%, while the BSE Small Cap index is trading up by 0.7%. The rupee is trading at 64.06 to the US$.

In news from stocks in the oil and gas sector. Indian Oil Corp (IOC) share price and Bharat Petroleum (BPCL) share price is in focus today, amid reports that the oil majors are both keen to acquire gas utility GAIL India to become fully integrated energy companies.

According to a leading financial daily, both IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to help add natural gas transportation and marketing business to their kitty.

The merger options were indicated following FM Arun Jaitley's announcement in the 2017-18 Budget speech on the government's plan to create integrated public sector oil majors that will be "able to match the performance of international and domestic private sector oil and gas companies".

Despite the interest from the oil majors, GAIL feels a merger with oil and gas producer would be more appropriate.

ONGC is currently in the process of acquiring the government's 51.1% stake in HPCL, for over Rs 300 billion at the current market price.

IOC and BPCL gave separate options for the integration. The government's 55% stake in GAIL is currently worth about Rs 467 billion. Integration options suggested by other companies would be taken up only after ONGC-HPCL merger is complete.

After three years of underachieving its disinvestment targets, the government is back with a bang. This time, it wants to focus on strategic stake sales of non-public sector units (PSUs) and areas where disinvestment has so far been poor. FY15-16 saw no disinvestment through this route.

Centre Gets Cracking on Disinvestment

For FY18, the total budgeted disinvestment target has been set at Rs 725 billion. Of this, Rs 465 billion is expected to come from minority stake sales, buybacks, mergers, public listings, and the CPSE ETFs. Rs 150 billion is likely to come from strategic sales. And the balance Rs 110 billion from listing of state-owned general insurance companies.

The biggest strategic disinvestment planned for this fiscal is the 51% stake sale in Hindustan Petroleum to ONGC. At current valuations, this deal would fetch the government more than Rs 300 billion, surpassing its strategic sale target for the year. The deal for GAIL, if it goes through could very well surpass this figure.

The disinvestment program has made slow progress so far. But as the government steps up public investments to spur economic recovery, it is leaving no stone unturned to shore up its revenues. To expedite the disinvestment process, it will set up a high-powered committee of ministers whose goal will be to reduce the time it takes to identify a company for strategic disinvestment. The committee will be comprised of the Finance Minister, the Transport and Highways Minister, and the minister of the administrative department of the company earmarked for strategic sale. Whether these efforts yield results only time will tell.

Moving on to news from stocks in the engineering sector. L&T share price is in focus today after the engineering major bagged a slew of orders.

The buildings and factories business of L&T's construction arm bagged orders worth Rs 33.5 billion.

The orders include design and construction of India International Convention & Expo Centre (IICC) in the national capital.

The mega project is planned over 89 hectares of land in Dwarka, New Delhi and will feature world class infrastructure facilities like exhibition spaces, convention areas, hotels, commercial offices, retail spaces. It will help the company in showcasing its mega projects execution capability. Besides, it will also improve its order book and revenue visibility going ahead.

The business also secured a contract to construct a major retail development in Navi Mumbai for IKEA. The construction for the proposed development will start in early 2018.

At the time of writing, L&T share price, was trading down by 0.3%.

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