New Delhi: The government has deferred its proposed Rs 12,000 crore share sale in state oil and gas explorer ONGC by at least two weeks due to unfavourable market conditions.

The follow-on public offer (FPO) was to open on September 20, but has been put off, Oil and Natural Gas Corp (ONGC) said in a statement to the stock exchanges.

"The selling shareholder (government) has decided not to proceed with the aforementioned offer programme and shall evaluate its decision in relation to the offer in due course," it said.

The company did not give new dates for the FPO.

The Department of Disinvestment (DoD), which is in charge of the FPO, under which the government is selling a 5 percent stake in ONGC, on Thursday sent out terse letters communicating the postponement of the share sale. It neither offered any reason for deferral of the FPO launch, nor new dates for the offer.

Sources privy to the development said the FPO is off for at least two weeks.

DoD officials met investment bankers managing the ONGC issue on Friday morning to discuss the future course of action. No details of the meeting were immediately available.

A Group of Ministers headed by Finance Minister Pranab Mukhejree was to meet on Friday to fix a price band for the FPO, but that meeting has been postponed.

The government plans to sell 5 percent, or 427.77 million shares, through the offer.

After the FPO, the government's stake in ONGC will come down to 69.14 percent from the current 74.14 percent.

The FPO was originally planned in the 2010-11 fiscal, but the launch was later deferred to April 5, as the company did not have an adequate number of independent directors on its board to meet market regulator SEBI's listing norms.

It was then rescheduled for July 5, but was again deferred due to adverse market conditions.

(Agencies)