 "Oil min against IndianOil share sale due to low investor interest")
The petroleum ministry has again objected to the divestment of state-run IndianOil Corporation (IOC), for a third time, following minimal response in domestic and international roadshows.
The government plans to disinvest 10 per cent in the company by mid-January.
Roadshows in Mumbai and Chennai had seen investors criticising the timing of the stake sale. Roadshows in the UK, the US, Hong Kong and Singapore saw lukewarm response, with investors showing minimal interest in the company.
When asked about this, a investor in the company told Business Standard, “We raised our objection regarding the timing and also because the shares are almost closer to an all-time low. This would be a huge loss for the government.”
The company’s shares were 2.2 per cent up at Rs 211.74 on Friday on the BSE.
In a recent letter to the ministry of finance, the petroleum ministry said, “The share price of IOCL now is Rs 201, which is close to a 52-week low of Rs 186. The share touched a high of Rs 430 in late 2009 and the last 52-week high was Rs 376. The government realisation would be less by Rs 4,225 crore as compared to the time when disinvestment was announced in January.”
IOC, too, had raised it objections to the finance ministry in this regard.
During the international roadshows, major funds such as JPMorgan, Templeton, T Rowe Price, Wellington Management, Aberdeen Asset Management and Schroders refused to meet the IOC team or did not show any interest.
The department had already fixed five merchant bankers — HSBC, UBS Securities, SBI Capital, J M Financial and Citibank — to manage the stake-sale process. The company has a market capitalisation of Rs 51,411 crore. “Funds like Templeton believe that it’s a valuable company for investors. Government policy and higher debt are causing concerns,” said an official source close to the development.
The government plans to disinvest 10 per cent in the company by mid-January.
Roadshows in Mumbai and Chennai had seen investors criticising the timing of the stake sale. Roadshows in the UK, the US, Hong Kong and Singapore saw lukewarm response, with investors showing minimal interest in the company.
When asked about this, a investor in the company told Business Standard, “We raised our objection regarding the timing and also because the shares are almost closer to an all-time low. This would be a huge loss for the government.”
The company’s shares were 2.2 per cent up at Rs 211.74 on Friday on the BSE.
In a recent letter to the ministry of finance, the petroleum ministry said, “The share price of IOCL now is Rs 201, which is close to a 52-week low of Rs 186. The share touched a high of Rs 430 in late 2009 and the last 52-week high was Rs 376. The government realisation would be less by Rs 4,225 crore as compared to the time when disinvestment was announced in January.”
IOC, too, had raised it objections to the finance ministry in this regard.
During the international roadshows, major funds such as JPMorgan, Templeton, T Rowe Price, Wellington Management, Aberdeen Asset Management and Schroders refused to meet the IOC team or did not show any interest.
The department had already fixed five merchant bankers — HSBC, UBS Securities, SBI Capital, J M Financial and Citibank — to manage the stake-sale process. The company has a market capitalisation of Rs 51,411 crore. “Funds like Templeton believe that it’s a valuable company for investors. Government policy and higher debt are causing concerns,” said an official source close to the development.