The government on Wednesday is understood to have approved a share split in oil and gas major ONGC and issue of bonus shares as a prelude to the company's follow-on public offer in March 2011.
Sources said the Cabinet Committee on Economic Affairs (CCEA) approved splitting a share of ONGC
with a face value of
Rs. 10 into two shares of
Rs. 5 each.
Besides, it is believed to have approved a 1:1 bonus issue (1 share for every share held).
However, no official comments could be obtained.
State-owned Oil and Natural Gas Corporation (ONGC) had suggested to the government that the company's stock be split ahead of the FPO -- through which the government plans to sell 5% of its shares and expects to mop up Rs. 10,800 crore.
Post offer, the government shareholding in ONGC would come down to 69.14% from current 74.14%.
Shares of ONGC closed up by Rs. 40.30, or 3.23%, at Rs. 1,288.50 a piece on BSE on Wednesday.
ONGC had appointed two international auditors -- DeGolyer and MacNaughton and Gaffney, Cline and Associates -- to certify its oil and gas reserves.
ONGC, which usually gets its reserves audited every five years, is getting a certification in the third year because of the planned FPO.