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Bourses, govt at odds on ONGC

business Updated: Mar 03, 2012 02:36 IST
HT Correspondents
HT Correspondents
Hindustan Times
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The government on Friday said that it had received an average price of Rs 303.67 for a share of ONGC that fetched a total of Rs 12,766.75 crore, even as the nation's main bourses, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) said their systems had operated normally without any glitches during Thursday's auction.

"While the buy orders at both exchanges reflected a demand of 29.22 crore shares around the market close, there were certain buy orders which were not immediately confirmed or were erroneously rejected by custodians due to a mismatch at the bidders' end, even though the orders were funded," the two stock exchanges said in a joint statement.

This followed remarks made by additional secretary in department of disinvestment, Siddharth Pradhan, on Thursday night, that the market regulator Securities Exchange Board of India (SEBI) has been asked to look into the technical glitches due to which some bids failed to get registered.

"After rectification of these errors, the final demand was for 42.04 crore shares," they said.

"The exchange systems operated normally and smoothly and there were no glitches," the joint statement from NSE and BSE said.

In the wake of the near-fiasco, finance minister Pranab Mukherjee said that the government would study the auction process before going ahead with divesting equity in other state-owned companies.

"This (ONGC auction) is the first case. We shall have to to analyse and then make assessment," Mukherjee told reporters on Friday.

According to the bourses, the problem took place because of the custodian, Stock Holding Corporation of India (SHCIL). SHCIL, according

to sources, was bidding on behalf of Life Insurance Corporation (LIC).

Ashok Motwani, managing director and CEO of SHCIL could not be reached despite repeated attempts.

ONGC's shares slid 4% in early trade on Friday to Rs 276 before closing out at Rs 282, a 2% dip over Thursday's close, on the BSE, significantly below the government's offer price of Rs 290.

The share sale of ONGC barely managed to scrape through with LIC's aggressive bidding in the closing stages of the auction process saving the day for the government.