Oil and Natural Gas Corp’s (ONGC) much-delayed Rs. 11,000 crore share sale is likely to be launched on September 20, with the State-run explorer filing papers for the public issue with market regulator SEBI on Monday.
“ONGC filed a 610-page red herring prospectus (RHP) with the Securities and Exchange Board of India (SEBI) today,” a source privy to the development said.
The follow-on public offer (FPO) is likely to open on September 20 and close on September 23.
The government plans to sell 5 per cent, or 427.77 million shares, through the FPO. At its today’s closing price of Rs. 256.85 per share on the Bombay Stock Exchange, the share sale will fetch about Rs. 11,000 crore.
After the FPO, the government’s stake in ONGC will come down to 69.14 per cent from the current 74.14 per cent.
A Group of Ministers headed by Finance Minister Pranab Mukherjee is likely to decide on the price band for the FPO on September 16 and the issue price would be fixed on September 25.
The source said roadshows for the FPO will begin today in the US. Promotional roadshows will also be held in Singapore, Hongkong and London.
The same will be held in Mumbai on September 19 and in the national capital the next day.
Sources said the RHP incorporates the financials of the company till the April-June quarter.
The FPO was originally planned in the 2010-11 fiscal, but the launch was later deferred to April 5 as the company did not have adequate number of independent directors on its board to meet SEBI’s listing norms.
It was then rescheduled for July 5, but was again deferred due to adverse market conditions.
The government had in January appointed Citigroup, Nomura Holdings, Bank of America Corp, HSBC Holdings, JM Financial Services and Morgan Stanley to manage ONGC’s share sale.
The government’s ad-hoc subsidy sharing mechanism has cast a shadow over ONGC’s share sale during recent months.