New Delhi: Oil India Ltd, the second state-run firm to hit the market with an offering of equity shares this year, may price its IPO that opens on 7 September at Rs1,000-1,100 a share.
OIL is looking at pricing its initial public offering (IPO) at closer to the prevailing share price of Oil and Natural Gas Corp (ONGC), a source close to the development said.
ONGC, the nation’s largest explorer, was trading at Rs1,167 on the Bombay Stock Exchange at 1400 hrs on Monday.
OIL, the source said, believes its earnings per share (EPS) and book value are better than ONGC and so it is looking at pricing the issue in the range Rs1,000-1,100.
The price band will, however, be fixed by a Group of Ministers in the last week of August.
The IPO, the second after the highly successful offering by hydroelectric power generator NHPC, will open on 7 September and close on 11 September. OIL will be listed on the bourses on 29 September.
The OIL management is currently holding an investor meeting in Hong Kong and Singapore.
OIL, which produces 3.5 million tonnes of oil annually, will offer 2.64 crore equity shares or 11% to the public through the IPO, while the government will simultaneously sell 10% of its stake in the company to state refiners.
Post-IPO and disinvestment, the government’s stake in the company will decrease from 98.13% to around 78.5%.
The source said the IPO proceeds would be used to fund the capex requirement of Rs2,300 crore for 2009-10 and Rs2,400 crore for 2010-11.
OIL was to launch its IPO of 11% equity on 10 November 2008, but the stock market downslide led to the postponement of the plan.
Alongside the IPO, the government will sell 10% of its current holding in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum. IOC will get about 5% while HPCL and BPCL would take about 2.5% each.
The public holding will be about 12%.