Oil India (OIL), the country’s second largest government-owned exploration and production company, plans to go ahead with its initial share sale to the public despite the stock markets falling more than 29 per cent from its peak in January. However, the issue, earlier scheduled for February, is likely to be delayed by a few months.
There were speculations that OIL’s share sale may be put off “indefinitely” as the government is not keen that the company enter a weak market.Rubbishing speculations that the share sale has been put off indefinitely due to market volatility, OIL Chairman and Managing Director MR Pasrija said, “Our fundamentals are strong and the demand for petroleum will remain high,” adding that the high crude oil prices would mean the bottomline would remain strong.
OIL had planned to offer 10 per cent of its shares to the public in February to raise around Rs 2,000 crore.But this sale didn’t happen as the company is yet to meet the Clause 49 norms, which makes it mandatory for a listed company with an executive chairman to have half of its board made up of independent directors.
Pasrija did not give a timeframe for the public offer as the company is awaiting government clearance.
The government also plans to sell 10 per cent of its equity in OIL to Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to raise another Rs 2,000 crore.
The company has appointed JM Morgan Stanley, Citigroup and HSBC Securities as the book running lead managers to the issue.
Read more in The Business Standard article.
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