The government will this week sell up to 1.5 per cent of its stake in the country’s top oil and gas producer ONGC to raise about Rs 3,000 crore. The Offer For Sale (OFS) by the government will be open on March 30 and 31, Oil and Natural Gas Corporation (ONGC) said in a stock exchange filing on Tuesday.
“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),” it said.
The government will sell about 19 crore shares at a floor price of Rs 159 per share. This price is at a 7 per cent discount to the Rs 171.05 stock closing price of ONGC on the BSE on Tuesday.
In the OFS, a minimum of 25 per cent of the shares are reserved for mutual funds and insurance companies while 10 per cent is earmarked for retail investors. Retail investors are defined as individual investor who bids for not more than 2 lakh shares.
ONGC employees can apply for equity shares worth up to Rs 5 lakh each, the filing said, adding that 0.075 per cent of equity shares sold in the OFS would be offered to eligible employees at the cut-off price.
Institutional or non-retail investors will get an option to carry forward their unallocated bids to the next day for allocation from the unsubscribed portion for retail investors. The issue will open for retail investors on March 31.
Govt Plan
The sale could be the government’s last attempt to shore up divestment receipts for the fiscal year ending March 31. The center will miss its revised divestment target of Rs 78,000 crore for FY22 as uncertainties due to the Russia-Ukraine war has postponed the initial public offering of Life Insurance Corporation of India. The center has so far garnered Rs 12,424 crore in divestment receipts this year.
ONGC Share
Shares of Oil and Natural Gas Corporation Limited (ONGC) slipped nearly 5 per cent on Wednesday to touch the day’s low of Rs 162.85 per share on the BSE. On an intraday basis making the stock the biggest loser on the Nifty50 at around 10:15 am. The correction was on account of the Offer For Sale (OFS) being undertaken by the government.
As per ONGC’s filing to exchanges, the government this week will sell up to 1.5 per cent of its stake (0.75 per cent Base + 0.75 Green Shoe Option) in the company to raise about Rs 3,000 crore. The OFS by the government will remain open on March 30 and 31, 2022, the release further stated.
