Govt manages to succeed with ONGC share sale

After some hiccups and a late government intervention, the sale of government's 5% stake in ONGC through an auction finally managed to sail through with an estimated proceeds of about Rs 12,000 crore to partly meet the disinvestment target of current fiscal.

Hectic parleys were held for more than four hours after the end of the auction process at 1530 hours and a final tally of the bids remained elusive for that time.

Late in the night, top Finance Ministry officials confirmed that the share sale has been a success and the government has raised the desired proceeds from the auction.

After putting the final bid tally after the end of the auction at about 229 million shares, as against total offer size of 427.7 million shares, the stock exchanges also later said that the issue has got fully subscribed in the auction, where the floor price was fixed at Rs. 290 a piece.

Late in the night, two exchanges in a joint statement said, "The ONGC offer for sale was completed today using the secondary market mechanism created by NSE and BSE. The final demand was for 420.4 million shares against an offer of 427.7 million shares."

Speaking to reporters, Additional Secretary in Department of Disinvestment Siddharth Pradhan said that the issue has got fully subscribed and the market regulator Sebi has been asked to look into the technical glitches due to which some bids could not get registered. Till about 9 pm the stock exchange data continued to show that the issue had failed to receive the desired bids.

As reports earlier in the day were not encouraging with bids worth only about Rs 8,500 crore, the government appears to have nudged the public sector giants, including LIC, to pitch in with their bids and help the issue sail through.

Pradhan said that the bids should have come in for shares worth about Rs 11,800-11,900 crore and the final proceeds could go even beyond Rs 12,000 crore after all the tabulation.

The glitches took place because of many bids coming in at the last moment and the system could not cope up, he added.

When asked whether the government has asked the public sector institutions to bail out the issue, Pradhan said: "We have not asked any one [to bail out]... ONGC shares are undervalued as compared to the peer group."

Sources said that various rounds of meetings took place among the government officials, stock exchange executives and Sebi personnel after the closure of auction.