The Cabinet Committee on Economic Affairs (CCEA) approved the disinvestment of 10 per cent government stake in the oil marketing company Indian Oil Corporation (IOC).

The government, which holds a 78.92 per cent stake in IOC, would offload 19.16 crore shares thereby mopping up Rs 3,750 crore (at the current market price of the scrip).

In order to manage the stake sale, the Disinvestment Department roped in five merchant bankers -- Citibank, HSBC, UBS Securities, SBI Capital and J M Financial.

The oil refining and marketing firm announced a net profit of Rs 5,005 crore in 2012-13, up from Rs 3,954 crore in the previous year. It has a market capitalisation of Rs 54,519 crore.

In 2009-10, profit of the firm peaked at Rs 10,221 crore. IOC sells fuel at below-market prices, for which it is partially compensated by the government.

The government's disinvestment target through PSU stake sales in the current financial year is Rs 40,000 crore. So far, it has raised over Rs 929 crore through stake sale in MMTC, Hindustan Copper and National Fertiliser.