ONGC expects to launch share sale in March

ONGC expects to launch share sale in March

New Delhi: State-run explorer Oil and Natural Gas Corp expects to launch a follow-on share sale in March, chairman R.S. Sharma said on Wednesday, sending its shares up 4%.

India has approved a 5% stake sale in ONGC that is expected to raise over $3 billion.

The company’s shares were up 4% to 1,299.00 by 01:40 pm, after touching a high of 1,300.50 , while the overall market gained 1%.

Sharma also said he expected the government to clarify subsidy mechanisms before the follow-on share sale.

ONGC is required to subsidise in part the sale of fuel to state-run retailers, who sell fuel at state-controlled, below market prices.

Its quarterly profits missed street estimates on higher subsidy payouts.

Analysts have said a delay in a decision on sharing of subsidies among oil companies and the government could discourage investors from ONGC’s stock offer.

Sharma added that he expected the government to decide on a two-for-one stock split soon for ONGC shares, which he has proposed to make them more attractive to investors.