The Hindu Business Line : ONGC offer opens in style — Oversubscribed 2 times on first day

THE sale of 10 per cent of ONGC shares — the largest-ever public issue in the country — was fully subscribed within 10 minutes of the opening of the offer.

Unconfirmed reports said legendary investor Mr Warren Buffet put in large bids for the offer of 14.25 crore ONGC shares, which was oversubscribed 2.23 times by Friday evening.

According to stock exchange data, the offer, which is expected to raise about Rs 10,000 crore for the Government, received bids for 31.81 crore shares on the first day.

The market grapevine as well as some media reports said Mr Buffet has put in about $1 billion. "It is not fair to comment on a single investor and as a matter of confidentiality, clients' details cannot be disclosed," said a top official of one of the lead managers to the ONGC issue.

The floor price of Rs 680 per share attracted the maximum number of bids, while the second-highest number was at the upper end of the band at Rs 750 per share.

The good response to the public offer was also seen on the stock price of the company, which gained 5.65 per cent to close at Rs 801 on NSE.

An equities analyst said if Mr Buffet had indeed bid for ONGC shares, it would be a big boost to the already booming stock market.

"For example, China Petro shares gained 133 per cent in value after Mr Buffet picked up a 12 per cent stake last year in the energy major," he said.

"Subscription of ONGC issue on the first day is the biggest event in the history of India's primary market," said Mr Ajay Sondhi, Vice-Chairman and Managing Director, Kotak Mahindra Capital Company, one of the lead managers to the issue.

The success of the ONGC issue shows that the Indian capital market can provide enough funds to companies.

"With this public offer, size (raising large amount) is not an issue for companies," Mr Sondhi said.

Most of the bids were received from institutional investors. "Both domestic and foreign institutional investors put in bids on the first day," said Mr Sondhi. Retail investors normally participate in an issue on the last day, he added.

Meanwhile, the sale of GAIL shares was oversubscribed around 6.3 times till late evening. The issue received bids for 53.33 crore shares compared to 8.45 crore shares being offered. Maximum bids of 20.80 crore shares were received at Rs 195 followed by at Rs 190 for 22.36 crore shares and bids for 7.39 crore shares were received at Rs 185 that is at the floor price.

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