ONGC today filed red herring prospectus with Registrar of Companies for further public offer (FPO). The company and Ministry of Disinvestment officials are currently in New York and Singapore to kick start the road show.

The PSU major intends to dilute 5 per cent stake through the share sale. The price of the issue is yet to be decided. The company share price closed at Rs 260.95 on Tuesday, up 1.60 per cent, on the BSE.

“It plans to offer 42.75 crore equity shares of Rs 5 each to the public by way of an offer of sale within a price band and at an offer price to be decided later in consultation with ONGC and the book running lead managers,” the company said in a statement.

With the FPO, the Government's stake in the company will come down to 69.14 per cent from the current 74.14 per cent. The proceeds of the issue will go to the Union Government.

The offer comprises a net offer of 41.92 crore equity shares to the public and 85.53 lakh equity shares to eligible employees.

The book running lead managers are JM Financial Consultants Private Ltd, Citigroup Global Markets India Private Ltd, DSP Merrill Lynch Ltd, HSBC Securities and Capital Markets (India) Private Ltd, Morgan Stanley India Company Private Ltd and Nomura Financial Advisory & Securities (India) Private Ltd.

The FPO was originally planned in the 2010-11 fiscal, but was deferred as the company did not have an adequate number of independent directors on its board to meet SEBI's listing norms.

The Government has so far garnered about Rs 4,700 crore in the current fiscal by divesting stake in the Power Finance Corporation, compared to the ambitious target of raising Rs 40,000 crore.

The other disinvestment candidates include SAIL, ONGC, BHEL and HCL.

Last fiscal, the Centre had raised Rs 22,763 crore by diluting stake in SJVN, Engineers India, Coal India, PowerGrid and Shipping Corporation of India.

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