Stocks

ONGC to file draft in March, but dates not known

Our Bureau Mumbai | Updated on March 01, 2011

Though there isn't much clarity regarding when the ONGC follow-on offering will hit the market, Mr Sumit Bose, Divestment Secretary, said the company will file its offer documents with SEBI in March. He would not, however, commit to a date for the issue itself.

The Chairman of ONGC, Mr A.K. Hazarika, had said on Friday after the company's Board meeting that it would file its Draft Red Herring Prospectus (DRHP) on Tuesday. Today, agency reports quoted Mr Hazarika as saying the DRHP filing would be delayed as the “company doesn't yet have the mandatory number of independent directors needed to conduct the share sale.”

Under Clause 49, independent directors are required to have at least 50 per cent representation on the board of directors of listed entities, including listed Central Public Sector Enterprises, in case the chairman is an executive member, or at least one-third in case the chairman is non-executive.

Mr Bose said that as of now ONGC is likely to hit the market with its Rs 10,000-crore-plus bumper follow-on issue in the month of March itself as per plans. “The plan is to launch the issue in March itself. But for sure the DRHP will be filed this month.” He explained that the company wanted to complete all the procedures related to the issue.

He had said that if the issue does go through this month, the proceeds from it will be accounted for in the next fiscal. “It takes nine days for the proceeds to come after the issue closes. So the issue proceeds could come in April,” he explained.

He also added that the current market condition does not deter the company from coming out with its issue.

In the Budget it was said that “As against a target of Rs 40,000 crore, the Government will raise about Rs 22,144 crore from disinvestment in 2010-11. A higher than anticipated realisation in non-tax revenues has led us to reschedule some of the divestment issues planned for the current year.”

Market-men said that the Government's divestment target for the next fiscal is achievable, what with the big ticket issues lined up. ONGC, SAIL, Power Finance Corporation, IOC and Hindustan Copper are all slated to hit the market next fiscal.

“The Rs 40,000-crore divestment target that the Government has set for the next fiscal is a cake walk. This is because these are quite large issues,” said Mr Jagannadham Thunuguntla, Strategist and head of research of SMC Global Securities.

>tania@thehindu.co.in

Published on March 01, 2011

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