Mumbai: Oil India Ltd, which is to go for an initial public offer (IPO) in early September to offload 11% stake, will soon file updated offer documents with market regulator SEBI for approval.
Oil industry sources said the updated offer documents are expected to be cleared by Sebi within a month following which as Red Herring Prospectus (RHP) will be filed.
The state-run explorer is expected to announce a price band immediately thereafter, perhaps in the last week of August, after approval by the Group of Ministers.
Oil India (OIL) would be the second public sector undertaking to go for an IPO this year after hydro-power utility NHPC Ltd, which has already announced a price band slightly over Rs28-34.
OIL has begun discussions with bankers, including HSBC Securities & Capital Markets, JM Financial Ltd, Citigroup Global Market India and Morgan Stanley India for the IPO.
While the OIL will offer 2.64 crore equity shares with a face value of Rs10 each, the government will also offload 10% of its stake in the company to state-run refiners.
Indian Oil Corp will get 5% while Bharat Petroleum and Hindustan Petroleum would each take 2.5%.
Post-IPO and disinvestment, government stake in OIL will decrease to 78.5% from 98.13%.
Proceeds from the IPO would be used to fund capex requirement for the next two years.
The estimated deployment of funds for 2009-10 comes to Rs2,335.7 crore, according to sources.
This including exploration and appraisal of blocks, development of producing fields, purchase of equipment and diversification into the downstream sector.
Oil India has a cash surplus of about Rs6,000 crore and is eyeing small to medium-sized acquisitions of companies or assets in Africa, CIS countries, South America and Australia.
The country’s second largest explorer has hydrocarbon blocks in eight countries, which includes Nigeria, Yemen, Libya, Sudan, Timor Leste, Gabon, Sudan and Iran.
OIL currently produces 3.5 million tonnes a year of oil and 6.8 bcm of gas.
It has proven plus probable (P2) oil reserves of over 573 million barrels and 48.32 bcm of P2 reserves.