ONGC rallies on getting govt nod for stock split, bonus issue

Oil and Natural Gas Corporation (ONGC) is trading higher by 7% at Rs 1,338 on reports that the Cabinet Committee on Economic Affairs (CCEA) has formally accepted splitting each share of the company into two from ten. Besides, it is belive to have approved a 1:1 bonus issue.

The department of disinvestment and investment bankers, which was advising the government on the matter, suggested a share split to attract small investors ahead of the follow-on public offer. The government currently owns 74.14% in ONGC and may raise Rs 14,500 crore through stake sale.

Meanwhile, the company informed the stock exchanges that the board of directors of the company will meet on December 16, to consider payment of interim dividend for the financial year 2010-11. The board has fixed December 21 as the record date for the payment of interim dividend.

The stock of ONGC opened at Rs 1,340 and hit a high of Rs 1,353 on the BSE. As many as 77,000 shares have already changed hands on the counter in opening deals as against an average 88,000 shares traded in the last two weeks.