IOC, ONGC follow-on-public offer by Jan-March 2011

Buoyed by the huge success of recent initial public offerings (IPOs) floated by public sector companies, the Centre will embark on the second phase of ‘big ticket' disinvestment by this month-end with Manganese Ore India Ltd. (MOIL) initial public offering (IPO) hitting the stock market on November 26.

This will be followed by the follow-on-public offers of Indian Oil Corporation and Oil and Natural Gas Corporation (ONGC), likely during the last quarter of this fiscal, which are aimed at moping up around Rs.21,000 crore.

The recent success of Coal India and Power Grid Corporation issues has pepped up the mood within government circles and the Centre is confident of meeting the disinvestment target of Rs.40,000 crore for this fiscal.

Talking to reporters here, Disinvestment Secretary Sumit Bose said on Thursday that his department was not raising the disinvestment target.

Mr. Bose also disclosed that Shipping Corporation of India (SCI) had filed the red herring prospectus with the Securities and Exchange Board of India.

MOIL will sell a total stake of 20 per cent, out of which the Centre's share will be 10 per cent of the total equity. Madhya Pradesh and Maharashtra governments will divest 5 per cent stake each in the public sector undertaking.

MOIL IPO will consist of 3.38 crore shares. While, two per cent shares will be reserved for employees, retail investors will get 5 per cent discount. The government is aiming to mobilise up to Rs.1,500 crore through this issue.

Indian Oil Corporation (IOC) has already appointed six merchant bankers to handle its issue, comprising fresh equity issue of 10 per cent and disinvestment of 10 per cent. The government intends to raise about Rs.21,000 crore through 10 per cent stake sale in the corporation. Besides, the government will disinvest 5 per cent in ONGC.

SCI is likely to hit the markets with Rs.1,300-crore FPO by the end of this month or early December. The government in October had approved selling its 10 per cent stake, comprising 42.35 million shares, in Shipping Corporation of India.

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