ONGC follow-on public offer likely to open on 5 July

The Rs11,5000-crore follow-on public offer (FPO) of state-run Oil and Natural Gas Corporation Ltd (ONGC) is finally expected to open for subscription on 5 July.

The issue is also timed to follow the proposed hike in auto fuel prices.
  
The government plans to sell 5 per cent of its paid-up capital (427.77 million shares) through the follow-on public offer (FPO) that will open on July 5 and close on July 8, official sources said today.

ONGC has a paid-up equity capital of Rs2,138.89 crore divided into 2,13,88,72,530 shares of Rs10 each. The government currently holds 74.14 per cent of the paid-up equity capital of the company and the balance is held by the public.

The government will divest 5 per cent of the paid-up equity capital of ONGC comprising 10,69,43,626 shares of face value Rs10 each pre-bonus and split out its shareholding through a further public offer in the domestic market

Post-FPO, the government's stake in ONGC would come down to 69.14 per cent from the current 74.14 per cent.

The share sale was originally planned for 2010-11 but was deferred to 5 April 2011 as the company did not have adequate number of independent directors on its board to meet the market regulator SEBI's listing norm.
    
The share sale had to be deferred again over appointment of independent directors on the company board.
    
"As per the scheduled drawn by the department of disinvestment in the ministry of finance, ONGC will file red herring prospectus (RHP) for the public offering around June 15," the official said. "Roadshows to promote the FPO would begin soon after," he added.
    
ONGC did not meet SEBI's listing norm of having an equal number of functional and independent directors and the government had previously planned to withdraw both its nominee directors on the board to push the FPO through.