'ONGC share split gets govt nod'

The government today is understood to have approved a share split in oil and gas major ONGC and issue of bonus shares as a prelude to the company's follow-on public offer in March 2011.

The government on Wednesday is understood to have approved a share split in oil and gas major ONGC and issue of bonus shares as a prelude to the company's follow-on public offer in March 2011.

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Sources said the Cabinet Committee on Economic Affairs (CCEA) approved splitting a share of ONGC with a face value of Rs 10 into two shares of Rs 5 each.

Besides, it is believed to have approved a 1:1 bonus issue (1 share for every share held).

However, no official comments could be obtained.

State-owned Oil and Natural Gas Corporation (ONGC) had suggested to the government that the company's stock be split ahead of the FPO -- through which the government plans to sell 5% of its shares and expects to mop up Rs 10,800 crore.

Post offer, the government shareholding in ONGC would come down to 69.14% from current 74.14%.

Shares of ONGC closed up by Rs 40.30, or 3.23%, at Rs 1,288.50 a piece on BSE on Wednesday.

ONGC had appointed two international auditors -- DeGolyer and MacNaughton and Gaffney, Cline and Associates -- to certify its oil and gas reserves.

ONGC, which usually gets its reserves audited every five years, is getting a certification in the third year because of the planned FPO.