The government of India plans to sell up to 1.5 per cent of its stake in the country’s top oil and gas producer ONGC to raise about Rs 3,000 crore. The government owns a 60.41 per cent stake in ONGC which produces half of India’s oil and gas.
The Offer For Sale (OFS) by the government will be open on March 30 and 31, Oil and Natural Gas Corporation (ONGC) said in a stock exchange filing on Tuesday.
“The promoter (the government) proposes to sell up to 94,352,094 equity shares of the company, (representing 0.75 per cent of the total paid-up equity share capital of the company) on March 30, 2022 (to non-retail investors) and on March 31, 2022 (to retail investors) with an option to additionally sell 94,352,094 equity shares (in case of oversubscription),” it said.
The floor price for the OFS has been set at Rs 159 per share. This price is at a 7 per cent discount to the Rs 171.05 stock closing price of ONGC on the BSE on Tuesday. In the OFS, a minimum of 25 per cent of the shares are reserved for mutual funds and insurance companies while 10 per cent is earmarked for retail investors. Retail investors are defined as an individual investor who bids for not more than 2 lakh shares.
ONGC employees can apply for equity shares worth up to Rs 5 lakh each, the filing said, adding that 0.075 per cent of equity shares sold in the OFS would be offered to eligible employees at the cut-off price.
The sale seems to be the government’s last attempt to shore up divestment receipts for the fiscal year ending March 31. The centre will miss its revised divestment target of Rs 78,000 crore for FY22 as uncertainties due to the Russia-Ukraine war has postponed the initial public offering of Life Insurance Corporation of India. The centre has so far garnered Rs 12,424 crore in divestment receipts this year.