Oil secy talks of IOC, ONGC issue; disinvestment dept contradicts

Written by fe Bureaus | New Delhi | Updated: Jul 28 2010, 04:48am hrs
The follow on public offers (FPO) of Indian Oil Corporation (IOC) and Oil & Natural Gas Corp of India (ONGC) would be considered, but there is no certainty that a decision will be arrived at this fiscal itself, the government indicated on Tuesday.

While announcing the FPO of Engineers India, petroleum secretary S Sundareshan said the government would consider the oil majors FPO by March end. However, disinvestment secretary Sumit Bose said that as of now, nothing is on the table. Bose also declined to commit that a decision on the stake sale of these PSUs would be taken next fiscal.

Bose said the government expects to raise Rs 977 crore from the 10% share sale in Engineers India Ltd (EIL), which opened on Tuesday. EILs public offer of 33.69 million equity shares will close on July 29 for qualified institutional buyers (QIBs) and on July 30 for retail and high net worth individuals. Half of the offer goes to QIBs, 35% to retail individual investors and 15% to non-institutional bidders. The price band has been set between Rs 270 and Rs 290 per share, but a 5% discount would be offered to retail individual investors and to eligible employees.

The government now holds 90.4% stake in EIL. Post FPO, government holding will drop to 80.4%. The company provides design and engineering services for petroleum, petrochemical, power, mining and fertiliser companies.

After EIL, the government would go for disinvestment in Power Grid Corporation, Coal India, Hindustan Copper, Steel Authority of India and Manganese Ore (India), Bose said. The government has set a target to raise Rs 40,000 crore from share sales in PSUs this fiscal, but reaching there seems difficult with the divestment in all approved cases. The initial public offering of shares in Coal India, the worlds largest coal miner, could hit the markets in October, he added.

EIL drops 1.5% as FPO opens

Shares of Engineers India (EIL) on Tuesday fell a further 1.5%, its sixth-straight day of decline, as its Rs 977 crore-follow-on public offer opened for subscription. The stock has lost 13% this month and is down 42% from its all-time of Rs 538 touched on May 7. On the first day, the company garnered just 1.25% subscription, it received total bids for 4.2 lakh shares. After the market regulator made 100% upfront payment compulsory for institutions investing in public issues, most bids are received on the day of closing. The company has priced FPO between Rs 270 and Rs 290. It intends to raise between Rs 910 crore and Rs 977 crore by selling 33.69 million shares of face value Rs 5 each.The issue closes on July 29 for qualified institutional buyers and a day later for retail and high net worth investors.