OIL IPO subscribed 91% in an hour

The initial public offer of state-run Oil India today got subscribed 91 per cent within an hour of opening of the issue.

The OIL IPO, which is the second stake sale by a PSU company after NHPC last month, received bids for over 2.40 crore shares as against 2.64 crore shares on offer, as per data available on the Bombay Stock Exchange.

The oil explorer is planning to raise up to Rs 4,982 crore through the IPO, which would 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. The Government would earn Rs 1,995-2,205 crore and the company would get Rs 2,512 crore and Rs 2,777 crore 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.