IOC may shell out Rs1,100 cr to buy 5% stake in Oil India

IOC may shell out Rs1,100 cr to buy 5% stake in Oil India

Mumbai: Indian Oil Corp (IOC) will buy one crore equity shares or 5% stake in Oil India Ltd (OIL) before the PSU explorer gets listed on the bourses later this month.

“We will be buying one crore shares of Oil India, but we are waiting for the Government to fix the date of purchase," IOC chairman, Sarthak Behuria, told PTI here.

The PSU refiner is likely to shell out Rs1,100 crore to pick up a 5% stake in OIL, he said.

Oil India Ltd, the nation’s second-largest state-run explorer, last week hit the capital market to raise funds for expansion.

The Government on Monday fixed the issue price of the share at Rs1,050 per share, raising about Rs4,982 crore.

The public issue of OIL, which closed on 10 September, was subscribed nearly 31 times, generating demand for shares worth over Rs85,576 crore.

The company offered 11% fresh equity (or 2.64 crore equity shares) to the public through the IPO at a price band of Rs950-1,050. Alongside the IPO, the Government will disinvest 10% of its stake in the company to state-run refiners at the IPO price.

At the higher end of the price band, IOC will have to shell out Rs1,050 crore to buy the 5% stake.

Post-IPO and disinvestment, the Government’s stake in the company will decrease from 98.13% to 78.5%.

Other state refiners, Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL), will also pick up 2.5% stake in Oil India each.

Oil India is scheduled to get listed on the stock exchanges on 30 September.