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Oil India IPO subscribed on first day

Oil India IPO subscribed on first day
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First Published: Mon, Sep 07 2009. 11 35 PM IST
Updated: Mon, Sep 07 2009. 11 35 PM IST
Mumbai: State explorer Oil India Ltd’s $570 million (Rs2,781 crore) initial public offering (IPO) was subscribed nearly 1.3 times on Monday, signalling investor appetite has not waned in the wake of a muted stock market debut for two recent big Indian listings.
Solid demand for Oil India, whose IPO follows recent offerings from state hydropower producer NHPC Ltd and private utility Adani Power Ltd, means the government may look to push more stake sales in state firms to fund spending and cut a yawning fiscal deficit.
The deal was fully covered within 30 minutes of opening, three bankers said, and by close on the first day, the 26.4 million share offering was subscribed 1.28 times, according to the National Stock Exchange’s website.
Most of the bids were at the top end of the Rs950-1,050 price band, one banker said. Analysts say strong fundamentals and bright long-term growth prospects will draw investors to Oil India.
The company has made discoveries more consistently than larger state-run rival Oil and Natural Gas Corp. Ltd in the past few years, while its overseas portfolio is promising, Angel Broking Ltd analyst Deepak Pareek said. “Management has also hinted at a potential stake buy via an overseas acquisition of around $1.5 billion,” he said. “We believe that acquisition of a producing property will improve the company’s production profile as well as reserves.”
Other state firms looking at share sales include top power generator NTPC Ltd, Shipping Corp. of India Ltd and Rural Electrification Corp. Ltd.
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First Published: Mon, Sep 07 2009. 11 35 PM IST
More Topics: Oil India | IPO | Banks | Financials | Markets |