Oil India geared up for IPO in Sept | business | Hindustan Times
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Oil India geared up for IPO in Sept

Riding revived market conditions, public sector Oil India Ltd will closely follow the high profile initial public offerings of NHPC and Adani Power to raise over Rs 2,000 crore to get listed on the stock exchanges.

business Updated: Jul 22, 2009 22:16 IST
HT Correspondent

Riding revived market conditions, public sector Oil India Ltd will closely follow the high profile initial public offerings (IPOs) of National Hydro Power Corporation (NHPC) and Adani Power to raise over Rs 2,000 crore to get listed on the stock exchanges.

Sources close to the development told Hindustan Times that the IPO of the country’s second largest oil exploration and production company will open for subscription on September 7 and is likely to be priced between Rs 800 and Rs 900 close to its larger sibling Oil and Natural Gas Corporation (ONGC) which is trading at Rs 1,092 at a price-to-earnings ratio of 15.

The company, with cash reserves of Rs. 6,800 crore, will issue 2.64 crore of fresh equity shares in the IPO. Alongside, the government will rake in another Rs 2,000 crore by offloading 10 per cent of its holding in the company. Currently the government holds 98.1 per cent, which after disinvestment equal to 10 per cent of the post-issue stake in the company will come down to 78.43 per cent.

“The money raised from the IPO will be used for its core business of exploration and production and also for acquisition of developed oil fields within India and abroad,” said an industry insider.

The company is expected to file its offer document with the Securities and Exchange Board of India (SEBI) by Friday.

The government will offload its 10 per cent equity in favour of Indian Oil, Bharat Petroleum and Hindustan Petroleum.

OIL produces 25 million barrels of oil per day and produces close to 10 per cent of the total crude oil produced in the country. It has proven and probable reserves of 573.9 million tonnes.