Exploration company Oil India Ltd plans to raise more than Rs 2,000 crore through an initial public offering of its shares, but the company might delay hitting the market if the global financial turmoil persists for long.
The government-owned company plans to offer 2.4 crore shares, which according to a person tracking the issue, is expected to help raise about $500 million.
As of now Oil India plans to hit the market on November 10, but there could be a delay “if the market situation continues to remain grim,” he said on condition of anonymity.
News of more trouble in the US has further tightened liquidity, causing a sustained slide in markets worldwide. Moreover, a falling rupee — the Indian currency has fallen more than 10 per cent over the past one month -- might discourage foreign institutions from buying fresh into Indian stocks.
Oil India needs close to Rs 4,574 crore to fund its operational requirements through 2008-09 and 2009-10. Proceeds from the proposed IPO could help raise a part of this money.
In the April-June quarter, Oil India booked a net profit of Rs 846 crore, which is almost half of the profit earned in the full fiscal year ended March 2008.
The buoyancy in profit came on the back of increased production and a spike in crude oil prices.