As the petroleum ministry is firmly opposing disinvestment of Indian Oil Corp (IOC) in the market, the finance ministry has proposed the option of selling a stake in IOC to other oil public sector units (PSUs).

Petroleum Secretary Vivek Rae has confirmed that P Chidambaram-led finance ministry has proposed the option of Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) picking up a 10 per cent stake in IOC.

Rae told reporters that the finance ministry was concerned about its revenues from disinvestment in public sector units and not on the mode of generation of the revenues.

Speaking to reporters, Rae said, "The finance ministry says give us Rs 4,600 crore either by way of disinvestment, cross-holding or special dividend. They have no particular objection to IOC shares being bought by ONGC or OIL."

It would not be the first time when the government would resort to the cross-holding route to generate revenues. In the late 1990s, the government had pocketed Rs 4,643 crore by selling its stakes in ONGC, GAIL and IOC through the cross-holding route. ONGC had purchased 9.11 per cent stake in IOC and 4.83 per cent stake in GAIL. IOC had bought 9.61 per cent and 4.83 per cent stakes in ONGC and GAIL, respectively. In turn, GAIL had bought 2.4 per cent stake in ONGC.

The finance ministry's proposal to sell 10 per cent stake in IOC to other PSUs surfaced after the EGoM on January 9 deferred disinvestment of the stake in IOC through an offer for sale in the stock markets. The oil ministry opposed the stake sale saying the company's share were valued way below the intrinsic value. On Friday IOC shares closed at Rs 200.35 apiece, far lower than their 52-week peak of Rs 375 a share on January 18, 2013.