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| OIL stock gains 9.3% on debut |
| BS Reporter / Mumbai Oct 01, 2009, 21:00 IST |
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The shares of the country’s second-largest oil explorer, state-run Oil India, gained 9.3 per cent on their debut on the National Stock Exchange on Wednesday.
Shares in the oil and gas explorer ended up 8.6 per cent to Rs 1,140.55 compared with the initial public offer (IPO) price of Rs 1,050. This was the third major IPO this year and helped Oil India raise Rs 2,700 crore.
NHPC’s was the first IPO by a state-run enterprise in the last 17 months after Rural Electrification Corporation (REC) went public in February 2008. The NHPC issue included sale of 5 per cent stake by the government and 10 per cent infusion of fresh equity.
Oil India had received bids for over 30 times the 26.4 million shares on offer for Rs 950-1,050 a piece. The government sold 10 per cent in Oil India for about Rs 2200 crore to state-run refiners — IndianOil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
Analysts had expected Oil India’s shares to rise 5-7 per cent. Anand Rathi Financial Services said it initiated coverage on Oil India with a buy rating and a target price of Rs 1,310. “We estimate that the post-IPO cash position will help increase exploration activity and possibly reserves and effectively de-risk the company’s concentration in the North-East,” it said.
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