The Oil and Natural Gas Corporation was unlikely to come out with a public issue within a year, chairman and managing director Subir Raha said, putting at rest speculation in the primary market of a public float from the Navratna firm.

Primary market operators and analysts were expecting a public issue soon, which, they felt, would help the government to cover the huge deficit it would face owing to failure in divestment of oil companies  --  Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

Raha said the company's cash flow requirement could be sorted out in three ways.

Decontrol of gas prices would help ONGC realise better prices from gas selling as ONGC now has to sell gas at less than its production price.

Liquidating its stake in other oil companies would also help. A public issue could come only after these.

He said the cash flow situation would dramatically improve once the price regulation on gas was abolished.

If that did not happen, the company would sell its shares in other oil companies such as IOC and GAIL India.

Given these options, the third option of raising money through a public issue was unlikely to be exercised a year or so.

ONGC has been investing $2 billion per year in India so far but this was expected to multiply in the coming years.

It had also invested heavily to buy oil and gas blocks abroad through its overseas arm OVL and would continue to do so.

On Friday's closing price, ONGC's shareholding in IOC and GAIL had a combined valuation of Rs 2,046 crore (Rs 20.46 billion).

ONGC has a 10 per cent stake in IOC and a 5 per cent stake in GAIL which it purchased in 1998.

The company bought 35.48 million shares of IOC at Rs 386.58 each and 40.84 million shares of GAIL at Rs 60 per share.

A public offering, analysts said, would also help the general investors as it would enhance the floating stock available in the market.

ONGC, the country's highest profit earner, has only 4 per cent floating stock which has often caused wide price fluctuations at the counter.

In addition to the government's direct holding of 84.11 per cent, IOC and GAIL holds 9.61 per cent and 2.40 per cent, respectively, leaving only 3.78 per cent floating in the market, including institutional shareholders.

On Friday's closing price, ONGC's shareholding in IOC and GAIL had a combined valuation of Rs 2,046 crore.