Business Daily from THE HINDU group of publications
Thursday, Sep 06, 2007
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Business Daily from THE HINDU group of publications Thursday, Sep 06, 2007 ePaper |
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Markets
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IPOs Industry & Economy - PSU Web Extras - Petroleum
Richa Mishra New Delhi, Sept. 5 Oil India Ltd (OIL) hopes to firm up the lead managers for its initial public offer (IPO) shortly. “The company has invited all the major merchant bankers to apply and we hope to take a decision by next week,” a senior company official said. He told Business Line that those invited include DSP Merrill Lynch, HSBC, Kotak Securities, SBI Capital Markets. The IPO would help OIL raise resources for its future expansion and growth. OIL plans to offer 10 per cent stake to the public in an IPO and another one per cent to its employees in February 2008, as the company is looking at completing the IPO in next six months. Assuming that the net value is Rs 600 per share, the company would be raising about Rs 1,428 crore through the 10 per cent IPO.
The company recently got Cabinet nod for fresh equity of 10 per cent of its paid-up capital through IPO along with a proposal of issuing additional one per cent of its paid-up capital to the employees of OIL. Oil marketing cos In addition to these two, the Cabinet has also approved disinvestment of 10 per cent of OIL's paid-up capital in favour of state-owned oil marketing companies (OMCs) - Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum in the ratio of 2:1:1, respectively.
Disinvestment of shares in favour of state-owned OMCs coupled with an initial public offer by Oil India, will reduce the effective Government stake in the company to about 78 per cent from the existing 98.13 per cent. The disinvestment in favour of OMCs would not only strengthen their existing synergies but would also help them to raise resources by disposing these shares in the open market at an opportune time to tide over their under recoveries. OIL has worked out an ambitious plan for the next five years. It plans to spend around Rs 10,000 crore for its business. )
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