On Wednesday and Thursday, the Centre will sell a 1.5 percent stake in Oil and Natural Gas Corporation (ONGC) through an Offer For Sale (OFS). At a floor price of ₹159 per share, the stake is worth nearly ₹3,000 crore.
An Offer for Sale is when promoters in public companies sell their shares and reduce their holdings.
This price represents a 7% discount to ONGC's stock closing price of ₹171.05 on the BSE on Tuesday.
The ONGC OFS will open for non-retail bidders tomorrow, March 30, and for retail investors on March 31, the company said in a stock exchange filing.
The proposed offer includes a base offer of approximately 9.5 crore shares, or 0.75 percent equity stake, and an equal amount to be retained in the event of oversubscription, bringing the total potential offer size to 1.5 percent.
According to the most recent shareholding data available, the Government of India owns slightly more than 60.41 percent of ONGC Ltd. Investors will be able to bid at or above the floor price of ₹159, or they can bid at the 'cut off' price. In accordance with the OFS guidelines, the allocation will take place on the basis of multiple clearing prices.
A minimum of 25% of the shares in the OFS are reserved for mutual funds and insurance companies, with the remaining 10% reserved for retail investors.
ONGC employees can apply for equity shares worth up to ₹5 lakh each, the filing said.
As of January 2022, the Centre had collected roughly ₹45,485.87 crore through divestment revenues and dividends combined. The divestment objective for fiscal year 2022 was previously set at ₹1.75 trillion, however, in the Budget 2022, it was reduced to ₹78,000 crore.
The Comptroller and Auditor General of India, had last week, said that India lost 3.8 million tonnes of crude oil worth ₹11,276 crore in four years due to less than planned water injection by ONGC in its western offshore fields.
ONGC shares ended over 3 percent lower at ₹171.05 on the BSE on Tuesday.