Cabinet approves stock split in ONGC

Cabinet approves stock split in ONGC

New Delhi: The Cabinet has approved state-run explorer ONGC stock split, road transport minister Kamal Nath told reporters on Wednesday.

He did not give further details.

Sources said the Cabinet Committee on Economic Affairs (CCEA) approved splitting a share of ONGC with a face value of Rs10 into two shares of Rs5 each.

Besides, it is believed to have approved a 1:1 bonus issue (1 share for every share held).

State-owned Oil and Natural Gas Corporation (ONGC) had suggested to the government that the company’s stock be split ahead of the FPO -- through which the government plans to sell 5% of its shares and expects to mop up Rs10,800 crore.

Post offer, the government shareholding in ONGC would come down to 69.14% from current 74.14%.

Shares of ONGC closed up by Rs40.30, or 3.23%, at Rs1,288.50 a piece on BSE on Wednesday.

ONGC had appointed two international auditors -- DeGolyer and MacNaughton and Gaffney, Cline and Associates -- to certify its oil and gas reserves.

ONGC, which usually gets its reserves audited every five years, is getting a certification in the third year because of the planned FPO.