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Indraprastha Gas IPO plan for non-residents spiked
New Delhi, Sept 12: Government is believed to have rejected Indraprastha Gas Ltd`s proposal to offer equity to non-residents and the city`s sole CNG supplier will now have to make the initial public offer to domestic investors only.
New Delhi, Sept 12: Government is believed to have rejected Indraprastha Gas Ltd's proposal to offer equity to non-residents and the city's sole CNG supplier will now have to make the initial public offer to domestic investors only.
IGL had proposed the offer for domestic and non-resident investors but has been allowed to proceed with an offer meant only for domestic investors, sources said here today.
"Under an initial public offer (IPO), the eligible investors would only be domestic investors, foreign institutional investors registered with SEBI and NRIs. Foreign individuals, companies and OCBs cannot be included in the eligible category of investors under an IPO," the foreign investment promotion board said while rejecting the proposal to make an offer to non-residents.
Besides, the Ministry of Petroleum and Natural Gas is discussing the issue with IGL promoters BPCL and GAIL. As per the proposal, IGL wanted to offload 5.8 crore shares aggregating to 41.43 per cent of its issued and paid up equity share capital to persons "residing outside India who have existing tie-ups, collaborations or technical tie-ups in India in the same field as IGL, on a repatriation basis".
The proposed IPO would have taken the book building route. Existing shareholders of IGL including IL&FS Trust Company, Infrastructure Development Finance Company and UTI would have offloaded their respective holdings in IGL under the proposed public issue. IGL is engaged in the business of distribution and sales of compressed natural gas to the transport sector and piped natural gas to the domestic and commercial customers of the national capital territory.
In its proposal for making an offer to the non-residents, the company had stated that it had been ratified by the board of directors of all the companies involved.
In a recent meeting, the foreign investment promotion board was informed by the department of economic affairs that the application was not permissible in its current form, as per the existing policy.
After DEA's recommendation, FIPB rejected the IGL proposal. Bureau Report
"Under an initial public offer (IPO), the eligible investors would only be domestic investors, foreign institutional investors registered with SEBI and NRIs. Foreign individuals, companies and OCBs cannot be included in the eligible category of investors under an IPO," the foreign investment promotion board said while rejecting the proposal to make an offer to non-residents.
Besides, the Ministry of Petroleum and Natural Gas is discussing the issue with IGL promoters BPCL and GAIL. As per the proposal, IGL wanted to offload 5.8 crore shares aggregating to 41.43 per cent of its issued and paid up equity share capital to persons "residing outside India who have existing tie-ups, collaborations or technical tie-ups in India in the same field as IGL, on a repatriation basis".
The proposed IPO would have taken the book building route. Existing shareholders of IGL including IL&FS Trust Company, Infrastructure Development Finance Company and UTI would have offloaded their respective holdings in IGL under the proposed public issue. IGL is engaged in the business of distribution and sales of compressed natural gas to the transport sector and piped natural gas to the domestic and commercial customers of the national capital territory.
In its proposal for making an offer to the non-residents, the company had stated that it had been ratified by the board of directors of all the companies involved.
In a recent meeting, the foreign investment promotion board was informed by the department of economic affairs that the application was not permissible in its current form, as per the existing policy.
After DEA's recommendation, FIPB rejected the IGL proposal. Bureau Report