Thu. Mar 28th, 2024
Government To Offload 1.5% Stake In ONGC To Raise ₹ 3,000 Crore

The Indian government is eyeing to raise ₹ 3,000 crore via selling its 1.5 per cent stake in Oil and Natural Gas Corporation Limited (ONGC), the country’s largest crude oil and gas production company. 

The bid for the offer for sale (OFS) will open on March 30 and 31, according to a regulatory filing.

The set price set rate for the OFS is ₹ 159 apiece, about 7 percent less than ONGC stock’s closing price of ₹ 171 on the NSE on Tuesday. 

ONGC shares fell over 5 per cent on Wednesday to close at Rs 161.80 on Wednesday.

Employees of ONGC can apply for equity shares valued up to 5 lakh each, according to the filing. In addition, it said, 0.075 percent of equity shares sold in the OFS would be offered to qualified employees at the cut-off price.

In the OFS, at least 25 percent of the shares are earmarked for mutual funds and insurance companies, while a 10 per cent quota is reserved for retail investors.

Also Read: Govt asks ONGC to give 60 percent stake in mainstay oil fields to foreign firms

“The promoter (the government) proposes to sell up to 94,352,094 equity shares of the company, (representing 0.75 per cent of the total paid-up equity share capital of the company) on March 30, 2022 (to non-retail investors) and on March 31, 2022 (to retail investors) with an option to additionally sell 94,352,094 equity shares (in case of oversubscription),” the company said in the filing.

The OFS follows closely the deal closed by ONGC Videsh, the foreign investment arm of Oil and Natural Gas Corp, where it sold at least one cargo of Russian Sokol oil to state refiners Hindustan Petroleum Corporation and Bharat Petroleum Corporation, after failing to gain traction from the tender it floated earlier this month.

After some companies and countries distanced themselves from buying Russian oil due to sanctions imposed by the US over Russia’s invasion of Ukraine, Indian companies are snapping the opportunity to buy Russian oil at significant discounts.

 India is the world’s third-largest oil importer and user. India has not imposed any sanctions on Russia yet. 

 Day 1 Subscription Of ONGC:

 According to the data available on the website on NSE, on March 30, 22, 

30,35,29,532 subscriptions were registered for general category, or 3.57 times of 8,49,16,884 shares, i.e. total issue size. 

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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