<b>Oil India IPO may hit on Sept 7</b>

Oil India Ltd, the nation's second-largest state-run explorer, may hit the market with an initial public offering (IPO) on September 7.

"As per the tentative schedule drawn, the IPO may open for public subscription on September 7 and will close on September 11," a Petroleum Ministry official said.

OIL, which produces 3.5 million tonnes a year of oil, will offer 2.64 crore equity shares to public in the IPO, while the government will simultaneously sell 10 per cent of its stake in the company to state refiners.

Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 per cent to 78.5 per cent.

The official said the IPO proceeds would be used to fund capex requirement for 2009-10 and 2010-11 when it had planned Rs 2,300 crore and Rs 2,400 crore expenditure respectively.

OIL has started discussions with bankers, including HSBC Securities & Capital Markets, JM Financial Ltd, Citigroup Global Market India and Morgan Stanley India for the IPO.

OIL was to launch its IPO of 11 per cent equity shares on November 10, 2008, but the reversal of fortunes on the stock markets led to the deferment of the plan.

Alongside the IPO, government is to sell 10 per cent of its current holdings in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum. IOC will get 5 per cent while HPCL and BPCL would take 2.5 per cent shares each.