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ONGC Stake Sale On Mar 1 Through Auction

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Running against time to meet the Rs 40,000-crore disinvestment target, the Centre decided to offload five per cent stake in ONGC on March 1 through auction route at a floor price of Rs 290 a share that could fetch the Exchequer about Rs 12,000-13,000 crore. "The ONGC stake sale through the auction route (will take place) in couple of days," Oil Minister Jaipal Reddy told reporters after a meeting of the Empowered Group of Ministers (EGoM) which was chaired by Finance Minister Pranab Mukherjee. "The floor price for the sale has been fixed at Rs 290 per share," ONGC said in a late night filing to NSE. The floor price, the minimum price for selling a share, is over 2 per cent higher than ONGC's closing price of Rs 283.05 on NSE and Rs 283.55 on BSE. The auction will be between 9.15 am and 3.30 pm. The government owns 74.14 per cent stake in ONGC and proposes to offload 427.77 million shares or 5 per cent equity. The sale may fetch the hard-pressed government about Rs 12,000-13,000 crore this fiscal. The shares would be sold to institutional as well as retail investors on the "price priority" basis. Six brokers including Citigroup Global Markets India, Morgan Stanley India Company and DSP Merrill Lynch will manage the share sale. The auction route or 'offer for sale of shares by promoters' involves very little paperwork and the whole process can be done within one trading day. Capital market Regulator Securities and Exchange Board of India (Sebi) had issued norms allowing promoters to sell stake by way of auction, through a separate window on BSE and the NSE, which has to be completed within a day. The auction route or 'offer for sale of shares by promoters' involves very little paperwork and the whole process can be done in just a trading day. This is the second disinvestment this fiscal, after mopping up Rs 1,145 crore through stake sale in Power Finance Corp. The government envisages to raise Rs 40,000 crore through disinvestments this fiscal. (PTI)