State-run Oil India Ltd has revived its plans for an initial public offering and hopes to launch the issue by September.
State-run Oil India Ltd has revived its plans for an initial public offering and hopes to launch the issue by September.
There is no change in Oil India’s plan to offer 10% of its equity to the public, chairman and managing director N M Borah said. The government will sell another 10% to state-run refiners, he said.
According to T K Ananth Kumar, director of finance, Oil India, the company aims to mop up $400 million-$500 million (Rs 1,900-2,400 crore) from the issue. “We are scheduled to meet the book-runners to the IPO tomorrow (Wednesday) to prepare the roadmap for the public issue,” Kumar said.
Oil India has appointed JM Morgan Stanley, Citigroup and HSBC Securities as the book-running lead managers to the issue. Kumar said the company has the necessary approvals from Securities and Exchange Board of India (Sebi) for the public offer. “Sebi’s approval is valid till September 10 and we are planning to launch the IPO before that deadline,” he said.
The company had initially planned the float in February last year but had to delay the IPO due to issues such as appointment of requisite number of independent directors and weak market conditions.
In August 2007, the government had allowed the company to issue fresh shares worth 10% of the paid-up capital in the IPO. Oil India plans to sell 264.5 crore shares of Rs 10 each in the IPO. This includes reservation of up to 24 crore shares for company employees.
Along with the IPO, the government also approved sale of 10% of its equity in Oil India to Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd. While Indian Oil will buy 5% of government’s stake in Oil India, HPCL and BPCL will get 2.5% each. The oil firms will buy the government’ s stake in Oil India at the IPO’s issue price. The government currently holds 98.2% in Oil India. Post-IPO and stake sale to oil firms, its holding in the company will fall to about 77%. The proceeds from the issue will be used to fund the company’s expansion plans in India and overseas.
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