The Central Government is understood to have approved a share split in oil and gas major Oil and Natural Gas Corporation (ONGC) and issue of bonus shares as a prelude to the company's follow-on public offer in March 2011.
Sources said the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved splitting a share of ONGC with a face value of Rs.10 into two shares of Rs.5 each. Besides, it is believed to have approved a 1:1 bonus issue (one share for every share held).
However, no official comments could be obtained.
State-owned ONGC had suggested to the government that the company's stock be split ahead of the FPO — through which the government plans to sell 5 per cent of its shares and expects to mop up Rs.10,800 crore.
Post-offer, the government shareholding in ONGC would come down to 69.14 per cent from the current 74.14 per cent.
Shares of ONGC closed Rs.40.30 higher or 3.23 per cent at Rs.1,288.50 on the Bombay Stock Exchange on Wednesday.
ONGC had appointed two international auditors — DeGolyer and MacNaughton and Gaffney, Cline and Associates — to certify its oil and gas reserves.
ONGC, which usually gets its reserves audited every five years, is getting a certification in the third year because of the planned FPO.
