The Hindu Business Line : ONGC scrip rules firm on huge bids in IPO

In today's trading, the oil major gained 6.06 per cent at Rs 850.90 on the BSE, with 23.50 lakh shares changing hands, and on NSE, the stock closed at Rs 855.10, up 6.75 per cent, with a volume of 55.75 lakh shares. Out of the total shares traded, 15.96 per cent shares were for delivery on BSE and 19.24 per cent on NSE.

Brokers said that after seeing the huge demand for the public issue several big investors have started buying the share from the secondary market thinking that they may not get the full allotment of all the shares they have applied for.

Till late evening, ONGC issue of 14.25 crore shares were oversubscribed 4.24 times (bids for 60.45 crore shares were received) with maximum bids being received at Rs 680 followed by at Rs 750.

On the first day of opening the offer, there were reports about Mr Warren Buffet bidding for ONGC stocks to the tune of $1 billion, which boosted the sentiment. But the reports were later denied by Mr Buffet.

"With the issue already oversubscribed more than four times, the denial by Mr Buffet had negligible impact," said a dealer with a foreign broking firm.

According to brokers, majority of the bids have come from FIIs. Mutual funds and FIs have also put in their bids.

Brokers said several institutional investors have started selling ONGC futures contract against the shares they have applied in the public offer. "By selling the futures investors are taking the arbitrage opportunity," said a dealer.

He said the cost of carry (or discount on annualised basis) on ONGC March futures over the spot price is around 38 per cent, which is normally high.