Oil India plans IPO to raise as much as $570 mn

Oil India plans IPO to raise as much as $570 mn

New Delhi: Explorer Oil India Ltd plans to raise as much as Rs2,780 crore ($570 million) through an IPO next month, a senior official said, making it the second state-run firm to offer new shares to the public this year.

Oil India, which deferred an IPO last year amid the global financial crisis, has set a price band of Rs950 to Rs1,050 a share, director for finance T. K. Ananth Kumar said by phone on Tuesday.

“We have set an exploration and production programme for the next two years where we will use the IPO proceeds," he said.

Oil India, which is tasked with scouting for oil and gas along with larger state-run rival Oil and Natural Gas Corp, has planned to invest Rs4,500 crore in exploration and production over the next two years, he said.

The IPO is scheduled to open on 7 September and close on 10 September, Kumar said.

The government will separately sell 2.41 million shares to state-run oil refiners Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum Corp to raise Rs2,530 crore, he added.

After the IPO and stake sale to the oil refiners, the government’s holding in Oil India will fall to 78.43% from 98.13%.

Oil India’s IPO follows strong appetite for state utility NHPC Ltd’s $1.25 billion IPO, which closed subscribed more than 23 times.

Indian firms have raised nearly $10 billion in share sales so far this year, surpassing 2008 volumes, helped by a 94% rally in the main share index from its 2009 lows in March.