Indian state-run explorer Oil and Natural Gas Corp's follow-on share sale, valued at around $2.5 billion and delayed by more than six months, is likely to launch on Sept 20 and will close on Sept 23, sources said on Monday.
The share sale, first scheduled for March, has been postponed several times in this year due to turmoil in global markets and lingering concerns over government fuel subsidies, part of which are borne by ONGC.
At the current stock price, the sale of a 5% stake by the Indian government would fetch nearly $2.5 billion but the shares are widely expected to be issued at a slight discount as the government looks to attract investors in a volatile market.
ONGC filed the prospectus for the public offer with the markets regulator late on Monday, said a source with direct knowledge of the matter.
All the sources declined to be identified as the matter was not public yet.
Bank of America Merrill Lynch, Citi, HSBC, JM Financial, Morgan Stanley and Nomura are the managers on the issue.
The offer is part of a broader federal plan to raise about $9 billion from share sales this fiscal year, an effort aimed at plugging India's fiscal gap and generating funds for schemes for the poor.
In 2010, the government raised $3.4 billion from a blockbuster initial public offer of Coal India, the world's largest coal miner.
In May, Power Finance Corporation completed a $1 billion share sale, the only divestment so far this fiscal year. The government received heavy interest from foreign investors for both offers.
Indian companies raised $7.1 billion in equity in the first half of 2011, down 42% from the year-ago period, Thomson Reuters data showed.
India's main stock index is down nearly 19% so far this year, making it one of the world's worst-performing markets.
Shares in ONGC, the third-largest listed firm in India by market value, have declined more than 20% so far in 2011. The stock ended down 2.6% at 256.95 rupees in a Mumbai market that fell 0.6%.
The company posted a 12% rise in first quarter profit, helped by higher crude oil and gas prices, but has seen its profit growth slow in recent quarters due to state-set fuel prices, which are lower than market rates.