ONGC Stake Sale: The government will this week sell up to 1.5 per cent of its stake in the country’s top oil and gas producer ONGC to raise about Rs 3,000 crore. The Offer For Sale (OFS) by the government will be open on March 30 and 31, Oil and Natural Gas Corporation (ONGC) said in a stock exchange filing on Tuesday.
“The promoter (the government) proposes to sell up to 94,352,094 equity shares of the company, (representing 0.75 per cent of the total paid-up equity share capital of the company) on March 30, 2022 (to non-retail investors) and on March 31, 2022 (to retail investors) with an option to additionally sell 94,352,094 equity shares (in case of oversubscription),” it said.
The floor price for the OFS has been set at Rs 159 per share, which is at a 7 per cent discount to the Rs 171.05 stock closing price of ONGC on the BSE yesterday.
In the OFS, a minimum of 25 per cent of the shares are reserved for mutual funds and insurance companies while 10 per cent earmarked for retail investors. Retail investors are defined as an individual investor who bids for not more than 2 lakh shares.
ONGC employees can apply for equity shares worth up to Rs 5 lakh each, the filing said, adding that 0.075 per cent of equity shares sold in the OFS would be offered to eligible employees at the cut-off price.
The government owns a 60.41 per cent stake in ONGC which produces half of India’s oil and gas.
ONGC informed the BSE that the base offer size of the OFS will be 94.35 million shares with a face value of Rs 5 each constituting 0.75 per cent of the equity of the company. The government will also exercise the option to additionally sell 94.35 million shares equivalent to a 0.75 per cent stake in the company by retaining oversubscriptions.
The Comptroller and Auditor General of India, had last week, said that India lost 3.8 million tonnes of crude oil worth Rs 11,276 crore in four years due to less than planned water injection by ONGC in its western offshore fields.
The Centre has been able to garner around Rs 45,485.87 crore through proceeds of divestment and dividends combined, as of January 2022. The divestment target for the fiscal year 2022, though initially was set at Rs 1.75 trillion, was later lowered to Rs 78,000 crore in the Budget 2022.
Union Finance Minister Nirmala Sitharaman had in her previous budget for 2020-21 set a target of raising Rs 2.1 lakh crore from privatisation and sale of minority stakes in state-owned firms. The divestment, before the close of the financial year on March 31, comes after the government deferred an initial public offer for the country’s largest insurer Life Insurance Corp. to next year due to market volatility.
ONGC shares ended over 3 percent lower at Rs 171.05 on the BSE on Tuesday.
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