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| Oil India IPO price fixed at Rs 950-1,050 a share |
| Press Trust of India / New Delhi Aug 24, 2009, 19:46 IST |
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The government today fixed a price band of Rs 950-1,050 per share for the initial public offering (IPO) of Oil India (OIL), the second state-run firm to hit the market this year, and will raise up to Rs 4,982 crore.
The price band was fixed by a Group of Ministers headed by Finance Minister Pranab Mukherjee this evening, official sources said.
The IPO, the second after the highly successful offering by hydroelectric power generator NHPC, will open on September 7 and close on September 11. OIL will be listed on the bourses on September 29.
Under the twin offer for disinvestment in OIL, which produces 3.5 million tonnes of oil annually, the company will offer fresh equity of 2.64 crore shares or 11 per cent, while the government will put on offer 10 per cent of its stake in the company to state refiners.
The IPO will help mop up Rs 4,507 crore at the floor price and Rs 4,982 crore at the ceiling rate. Government would earn Rs 1,995-Rs 2,205 and the company would get Rs 2,512 to Rs 2,777 at the lower and upper end of the band, respectively.
Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 per cent to 78.5 per cent.
Sources said the IPO proceeds would be used to fund the capex requirement of Rs 2,300 crore for 2009-10 and Rs 2,400 crore for 2010-11.
Alongside the IPO, the government will sell 10 per cent of its current holding in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum. IOC will get about 5 per cent while HPCL and BPCL would take about 2.5 per cent each.
The public holding will be about 12 per cent.
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