The Hindu Business Line : IOC, GAIL cannot sell equity in ONGC for six months

THE Government, GAIL India and IOC will not be able to sell their equity in ONGC for six months after the proposed public offer for sale of 10 per cent Government equity in ONGC which is slated to open on March 5, a top company official has said.

"There is a lock-in period of six months for the sale of equity held by the Government, GAIL and IOC in ONGC following the public offer," Mr Subir Raha, Chairman and Managing Director, told newspersons here on Thursday.

The offer for sale document relating to the public offer in ONGC states: "The Government, GAIL and IOC have undertaken not to sell or otherwise dispose of any of our equity shares or any securities related to our equity shares held by them for a period of six months from the date of transfer of equity shares pursuant to the public offer."

This implies that the sale of cross-holdings held by GAIL and IOC in ONGC cannot be carried out until six months after the public offer. GAIL and IOC together hold 12 per cent equity in ONGC. The Government currently holds 84.11 per cent stake in ONGC, which will be reduced to 74.11 per cent after the public offer.

The price band/floor price for the 100 per cent book-built offer will be announced one day prior to the opening of bids. The issue will remain open till March 13.

Mr Raha said that up to 50 per cent of the total shares on offer shall be allocated on a discretionary basis to qualified institutional buyers, not less than 25 per cent of the total offer shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 25 per cent of the total offer shall be available for allocation on a proportionate basis to retail individual bidders subject to valid bids being received at or above the offer price. The minimum bid for retail individual bidders is 10 equity shares.

Besides, up to 10 per cent of the offer is reserved for permanent employees/whole-time directors of ONGC, the shareholders of ONGC (other than Government, GAIL and IOC) and shareholders of Mangalore Refinery and Petrochemicals Ltd (other than ONGC and HPCL).

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