The Centre has advanced the public offering of Oil and Natural Gas Corp (ONGC) to February 2011, while pushing back the share sale of Indian Oil Corporation (IOC) following the rise in global oil prices.
The Cabinet, on December 1, approved the sale of government's 5 per cent stake in ONGC to raise up to Rs.13,000 crore, sources privy to the decision said.
The follow-on or further public offering (FPO) of ONGC is planned for mid-February or early March, a month earlier than previously planned. IOC's public offering was to have come up in the third or fourth week of January, but would now follow ONGC.
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The Cabinet has not yet approved the sale of its 10 per cent shareholding in IOC that at current market price would fetch close to Rs.9,000 crore. IOC has already appointed six merchant bankers for the FPO, which was to be clubbed with a similar size offering to raise funds for company's expansion plans.
“The rise in crude oil prices to $90 a barrel has made IOC less attractive to investors as it does not have freedom to sell auto and cooking fuel at market rates. The firming up of international oil prices means that it will lose more money on fuel sales as difference between domestic retail price and imported cost widens,” a source said.
On the other hand, ONGC has become attractive as the company gets international price for the crude oil it produces. “Merchant bankers for the ONGC FPO will be appointed by the month end while the red herring prospectus that will incorporate financial details of the first three quarters, will be filed by January-end,” another source said.
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