Bracing up for disinvestment process proposed to be held in the last quarter of current fiscal, Oil and Natural Gas Corporation (ONGC) on Thursday approved a special dividend, free share and a stock split.
The government will rake in Rs.5,074 crore from the Rs.32 per share special interim dividend approved by the ONGC board. The board also approved issue of one free share for each held (1:1 bonus issue) and splitting each equity share of Rs.10 face value into two shares of Rs.5 (2:1 stock split).
“The total dividend payout will be Rs.6,844 crore, of which Rs.5,074 crore will go to the government. Besides, ONGC will also pay Rs.1,163 crore in dividend tax to the government on the special interim dividend,” ONGC Chairman and Managing Director R. S. Sharma told reporters here.
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While the record date for payment of special dividend has been fixed as December 21, the company will seek shareholders' approval for the stock split and bonus issue through a postal ballot.
Post-stock split and bonus issue, one share of Rs.10 will become four shares of Rs.5 each. “Based on the current indications, the 5 per cent government stake follow-on public offer should be opening around the first week of March,” Mr. Sharma said.
Mr. Sharma said the book running lead mangers (BRLM) for the FPO are likely to be appointed by the first week of January. Also, the five independent directors, needed to meet SEBI's listing requirement, will be in place before end-January when the draft prospectus for the public offer will be filed.
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After the share split and bonus issue, the market value of ONGC's shares will be around Rs.335, as against Thursday's closing price of Rs.1,329 on the Bombay Stock Exchange. Following the offer, the government's stake in ONGC would come down to 69.14 per cent from 74.14 per cent at present. Mr. Sharma said ONGC was likely to get its oil and gas reserves certified by international auditors — DeGolyer and MacNaughton (D&M) and Gaffney, Cline and Associates (GCA), in a month's time.