The government will by mid-January appoint merchant bankers for the mega Rs 13,500 crore public offering of Oil and Natural Gas Corporation (ONGC) that is being targeted to hit the market in March.
"The advertisement for appointment of Book Running Lead Managers (BRPL) will be issued tomorrow with January 14 being the last date for putting in expression of interest," a senior government official said after a meeting of Inter-Ministerial Group (IMG) on the ONGC follow-on public offer (FPO).
The government plans to sell 5 per cent of its stake in ONGC through the FPO which at current prices can fetch up to Rs 13,500 crore.
The official said the short-listed merchant bankers would be called for presentations on January 15 and 16 and six BRMLs for the FPO would be appointed the following day.
Legal advisors would be called for presentations on January 18 and would be engaged the next day.
The red herring prospectus (RHP) for the FPO would be filed around mid-February, before which five more independent directors on the board of ONGC will be appointed to meet market regulator Sebi's listing requirement.
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ONGC has six functional directors besides chairman and managing director. It also has two government appointed nominee directors taking the total strength to nine.
Besides, the company currently has four independent directors and it needs five more to meet the Sebi's listing requirements.
"The FPO will hit the market in March. We will decide on the dates closer to the issue. We have deliberately kept flexibility to get maximum," the official said.
Post offer, the government shareholding in ONGC would come down to 69.14 per cent from current 74.14 per cent.
As a precursor to the share sale, ONGC will split equity shares with a face value of Rs 10 each into two shares of Rs 5 each. It will also issue a free share to every shareholder.
After the share split and bonus issue, the market value of ONGC's shares will dip to around Rs 323, as against today's trading price of Rs 1,290 on the Bombay Stock Exchange and it is expected this will be an attractive level for retail investors to subscribe to the company.
ONGC has already appointed two international auditors -- DeGolyer and MacNaughton and Gaffney, Cline and Associates -- to certify its and its subsidiary ONGC Videsh Ltd's oil and gas reserves, a prerequisite for any exploration firm going for a public offering.
The official said the reserve certification would come by this month or early January.
The company, which usually gets its reserves audited every five years, is getting certification done after just a three-year gap this time because of the planned FPO.