State-owned oil marketing behemoth Indian Oil Corporation (IOC) expects to sell share at Rs 450 a piece in the follow-on public offer (FPO), which it plans to float by end of January 2011.
This is much higher than the current ruling price. The company’s share price closed at Rs384.1 on Wednesday. “We expect the pricing to be around Rs 450 (per share),” said B M Bansal, chairman, IOC.
IOC’s FPO could well be the largest ever public issue in the country’s capital market history erasing Coal India Limited’s (CIL) recent initial public offering (IPO) that fetched the government about Rs 15,000 crore.
IOC’s FPO, through which the government will divest 10% share along with the government selling an equal number of shares, is expected to be of about Rs 20,000 crore.
The company’s FPO has also been helped by the partial deregulation of oil prices when in June this year the government decided to allow oil companies to fix petrol prices.
IOC has been most affected by the “ambiguous” fuel pricing and the uncertain mechanism to compensate retailers for losses on selling fuel below cost, an official said.
IOC has hired six banks, Merrill Lynch, Citigroup and ICICI Securities, to handle the public offer. Morgan Stanley, SBI Capital and UBS are other banks hired by the company.
The government also plans to sell 5% stake in ONGC, through an FPO expected in 2011-12. The government at present owns 74.1% stake in ONGC and 78.9% stake in IOC.
Indian Oil Corporation’s FPO is expected to be of about Rs 20,00 crore.
The company has hired six banks, Merrill Lynch, Citigroup and ICICI Securities, Morgan Stanley, SBI Capital and UBS to handle the public offer.
The government at present owns 74.1% stake in ONGC and 78.9% stake in IOC.