Mumbai: The initial public offer of state-run
Oil India on Monday got subscribed 91 percent within an hour of
opening of the issue.
The OIL IPO, which is the second stake sale by a PSU
company after NHPC last month, received bids for over 2.40
crore shares as against 2.64 crore shares on offer, as per
data available on the Bombay Stock Exchange.
The oil explorer is planning to raise up to Rs 4,982
crore through the IPO, which would close on September 11. OIL
will be listed on the bourses on September 29.
Under the twin offer for disinvestment in OIL, which
produces 3.5 million tonnes of oil annually, the company will
offer fresh equity of 2.64 crore shares or 11 percent, while
the government will put on offer 10 percent of its stake in
the company to state refiners.
The IPO will help mop up Rs 4,507 crore at the floor
price and Rs 4,982 crore at the ceiling rate. The Government
would earn Rs 1,995-2,205 crore and the company would get Rs
2,512 crore and Rs 2,777 crore at the lower and upper end of
the band, respectively.
Post-IPO and disinvestment, the government`s stake in the
company will decrease from 98.13 percent to 78.5 percent.
Sources said the IPO proceeds would be used to fund the
capex requirement of Rs 2,300 crore for 2009-10 and Rs 2,400
crore for 2010-11.
The government will sell 10 percent of its current
holding in OIL to Indian Oil Corp, Hindustan Petroleum and
Bharat Petroleum. IOC will get about five percent, while HPCL
and BPCL would take about 2.5 percent stake each in the firm.
JM Financial Consultants, Morgan Stanley Company India
Pvt Ltd, Citigroup Global Markets India Pvt Ltd and HSBC
Securities and Capital Markets (India) Pvt Ltd are the lead
book runner of the issue.
Rating agency Crisil has assigned a grade of four (out of
five), indicating above average fundamentals, to the issue.