IOC may shell out 1,100 cr to buy 5% stake in Oil India
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Last Updated: Tuesday, September 15, 2009, 09:59
Mumbai: Indian Oil Corp (IOC) will buy one crore equity shares or five percent stake in Oil India Ltd (OIL) before the PSU explorer gets listed on the bourses later this month.

"We will be buying one crore shares of Oil India, but we are waiting for the government to fix the date of purchase," IOC Chairman, Sarthak Behuria, said in Mumbai.

The PSU refiner is likely to shell out Rs 1,100 crore to pick up a five percent stake in OIL, he said.

Oil India Ltd, the nation's second-largest state-run explorer, last week hit the capital market to raise funds for expansion.

The government on Monday fixed the issue price of the share at Rs 1,050 per share, raising about Rs 4,982 crore.

The public issue of OIL, which closed on September 10, was subscribed nearly 31 times, generating demand for shares worth over Rs 85,576 crore.

The company offered 11 percent fresh equity (or 2.64 crore equity shares) to the public through the IPO at a price band of Rs 950-1,050. Alongside the IPO, the government will disinvest 10 percent of its stake in the company to state-run refiners at the IPO price.

At the higher end of the price band, IOC will have to shell out Rs 1,050 crore to buy the five percent stake.

Post-IPO and disinvestment, the Government's stake in the company will decrease from 98.13 percent to 78.5 percent.

Other state refiners, Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL), will also pick up 2.5 percent stake in Oil India each.

Oil India is scheduled to get listed on the stock exchanges on September 30.

Bureau Report

First Published: Tuesday, September 15, 2009, 09:59

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