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Madhumita Chakraborty
New Delhi, Aug 18: Indian Oil Corporation's (IOC) global depository receipts (GDR) issue is slated to hit the road around October, possibly close on the heels of the Concor disinvestment programme.
New Delhi, Aug 18: Indian Oil Corporation's (IOC) global depository receipts (GDR) issue is slated to hit the road around October, possibly close on the heels of the Concor disinvestment programme.
As on date, the global advisors to the IOC issue and the inter-ministerial core group (that has had a series of pow-wows on the disinvestment programme), have decided to make a full float of the 10 per cent Indian Oil equity the Centre plans to divest in, through the GDR route. At one time, policy-makers were toying with the idea of a twin issue of government shares, comprising a domestic issue and a GDR float.
While domestic issues may still be part of the disinvestment programme at large, the shedding of government stake in Indian Oil will for now, be restricted to an equity offer abroad. The centre plans to mop up Rs 5000 crore from the sale of shares in Indian oil, the Gas Authority of India Limited (Gail), the Videsh Sanchar Nigam Limited (VSNL) and the Container Corporation of India (Concor).
The union cabinet has approved a 10 per cent disinvestment in Indian oil, of the centre's total shareholding of 91.3 per cent. Some government equity in the company's Rs 389.3 crore share capital has already been offloaded in favour of its employees in 1995-96.
The Indian Oil GDR issue, which was initially scheduled early this year, was supposed to consist of 7.5 per cent of government holding in the company. The centre planned to subsequently float another 2.5 per cent of its 91.3 per cent stake in the premier oil refining and marketing company, in the domestic capital market. Disinvestment in GAIL was also expected to comprise a GDR issue and a domestic offer of shares, subsequently.
Incidentally, at the moment, the Indian Oil stock is trading rather close to its 52-week low on the Bombay Stock Exchange. The scrip, with a face value of Rs 10, is quoting at roughly Rs 474 on Dalal Street, compared to Rs 869 some time ago. The lowest the scrip touched on the Bombay Stock Exchange within this year was Rs 435.
The poor performance of the stock is notwithstanding the 105 per cent growth in its net profit and 21 per cent jump in its turnover in the first quarter of this year and so, has more to do with the general downslide in stock prices at the bourses. The Rs 55,389 crore-turnover blue chip earned a profit of Rs 590 crore and a sales income of Rs 17,134 crore in the first three months of this year.
Last year the company's net profit jumped by 32 per cent to Rs 2678 crore and it paid a 25 per cent dividend, compared to 20 per cent paid out to shareholders in 1996-97. Indian oil ranks 257 among Fortune magazine's list of the "Global 500'' industrial and service companies. It is among the 76 top Asian companies in the Fortune list.
The Indian oil GDR issue, originally slated for January, was held back on the advice of its lead managers, who felt that the Southeast Asian currency crisis and the slump in stock markets that followed, could have a fallout on the pricing of Indian oil scrip. The GDR issues of GAIL and VSNL hit the road late last year, only to be pulled back, when the book-building exercise yielded a price that did not live up to government expectations.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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