The government is not likely to offer any discount in the public offers of Oil and Natural Gas Corporation and Gail India Ltd.

The Centre is hopeful the institutional book-built process will fetch an attractive price band for the sale of 10 per cent of the government's equity in the two public sector companies.

While Gail India has already submitted its Red Herring prospectus with the Securities and Exchange Board of India, ONGC is expected to do the same by January 27.

The public offers in the two PSUs, along with the sale of residual equity in CMC, IBP, IPCL and an initial public offer in Dredging Corporation of India Limited, are expected to boost the availability of good quality papers in the stock markets.

Both finance and divestment ministries have taken a position that there should be maximum retail participation in the public offers. This is expected to deepen the capital market.

Gail has already said 25 per cent of the issue would be allotted to retail investors. ONGC is expected to move in a similar vein.

The decision on the offer price is expected to be formalised just before the issues hit the capital markets.

However, a meeting of the inter-ministerial group will be called before that to decide on the price band. A discount was expected to add to the attractiveness of the offers to the public.

The issues are expected to be completed before the end of this financial year, which will help the government cross the divestment target of Rs 13,200 crore (Rs 132 billion) set for 2003-04.

However, because of the current uncertainty in the stock markets, the targets are suddenly looking a bit stiff.

Officials said they were committed to ensure that the process was completed by the end of March, but they were becoming reconciled to the fact that the realisation from the proceeds might not be adequate.

Since the decisions about the timings had been set on political considerations, they said it was not within the ken of the ministries to undertake any change in the schedule.