Oil India price band fixed at 950-1,050

By SiliconIndia   |   Tuesday, August 25, 2009
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Bangalore: The government has a price band of Rs. 950-1,050 per share for the initial public offering (IPO) of Oil India (OIL), the second state-run firm to hit the market this year. The company is planning to raise up to Rs. 4,982 crore from the public offering. Under the twin offer for disinvestment in OIL, which produces 3.5 million tonnes of oil annually, the company will offer fresh equity of 2.64 crore shares or 11 percent, while the government will put on offer 10 percent of its stake in the company to state refiners. The IPO, the second after the highly successful offering by National Hydroelectricity Power Corporation (NHPC), will open on September 7 and close on September 11, 2009. OIL will be listed on the bourses on September 29. The IPO will help mop up Rs. 4,507 crore at the floor price and Rs. 4,982 crore at the ceiling rate. Government would earn Rs. 1,995-2,205 and the company would get Rs. 2,512-2,777 at the lower and upper end of the band, respectively. Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 percent to 78.5 percent. Alongside the IPO, the government will sell 10 percent of its current holding in OIL to Indian Oil Corporation (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL). IOC will get about five percent while HPCL and BPCL would take about 2.5 percent each. Sources said the IPO proceeds would be used to fund the capital expenditure requirement of Rs. 2,300 crore for 2009-10 and Rs. 2,400 crore for 2010-11.
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