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| Oil India IPO to hit market on Sept 7 |
| Press Trust of India / Mumbai Aug 08, 2009, 14:33 IST |
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Oil India Ltd (OIL), the nation's second-largest state-run explorer, will hit the market with an initial public offering (IPO) on September 7.The offer will be open from September 7 to 11, a source close to the development said.
The price band for the IPO is likely to be fixed on August 25, the source said.
OIL management is currently holding meetings with bankers in Mumbai and would be visiting Hong Kong and Singapore over the next couple of days.
OIL, which produces 3.5 million tonnes of oil annually, will offer 2.64 crore equity shares to the public through the IPO, while the government will simultaneously sell 10 per cent of its stake in the company to state refiners.
An 11 per cent fresh equity will be sold in the IPO while the government would divest 10 per cent of its stake at the IPO price.
Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 per cent to 78.5 per cent.
The source said the IPO proceeds would be used to fund capex requirement for 2009-10 and 2010-11 when it had planned Rs 2,300 crore and Rs 2,400 crore expenditure respectively.
OIL has started discussions with bankers, including HSBC Securities & Capital Markets, JM Financial Ltd, Citigroup Global Market India and Morgan Stanley India for the IPO.
OIL was to launch its IPO of 11 per cent equity shares on November 10, 2008, but the reversal of fortunes on the stock markets led to the postponement of the plan.
Alongside the IPO, the government will sell 10 per cent of its current holdings in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum. IOC will get 5 per cent while HPCL and BPCL would take 2.5 per cent shares each.
Post-IPO and equity transfer, government shareholding in the company will come down to 78.43 per cent. IOC will hold 4.45 per cent equity stake in the expanded equity base while HPCL and BPCL will hold 2.23 per cent each. Public holding would be 12.66 per cent.
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