State-owned Oil and Natural Gas Corporation (ONGC) on Tuesday announced that its Rs.12,000-crore follow-on public offer (FPO) is likely to open by the end of next month.
“The ONGC board approved the red herring prospectus (RHP) on Monday which will be filed as per the instructions of the government,'' ONGC Chairman and Managing Director, A. K. Haziraka told reporters here. The RHP is likely to be filed with market regulator SEBI on September 5.
The FPO, through which the government is selling 5 per cent of its stake in ONGC, may open on September 20 or 27. ``Keeping the strong fundamentals of ONGC in view, we are confident that the response from the investors will be overwhelming,'' Mr. Hazarika said.
On August 29, ONGC's board approved the RHP after incorporating the company's financial results for the April-June quarter. The government plans to sell 5 per cent, or 427.77 million shares, through the FPO.
The FPO was originally planned in the 2010-11 fiscal, but was later deferred to April 5 as the company did not have an adequate number of independent directors on its board to meet market regulator SEBI's listing norms. It was then rescheduled for July 5, but was again deferred due to adverse market conditions.
Following the FPO, the government's stake in ONGC will come down to 69.14 per cent from the current 74.14 per cent. During the April-June quarter, upstream firms shouldered one-third of state-run oil marketing companies' over Rs.43,000-crore revenue loss on fuel sales.
On the other hand, he said two of its petrochemical projects will commence operations by 2013. The projects are being developed through joint ventures. “Two petrochemical projects, one each by ONGC Petro-additions and ONGC Mangalore Petrochemicals are expected to be commissioned in 2012 and 2013, respectively,'' he said.
Mr. Hazarika said refining capacity of Mangalore Refinery Petrochemicals, a subsidiary of ONGC, would be enhanced to 15 million tonnes by next year from 10 million tonnes annually.
