Kotak, DSP to manage ONGC divestment, I-Sec, HSBC Sec get GAIL mandate

The government appointed Kotak Mahindra Capital Company, DSP Merrill Lynch and JM Morgan Stanley as book-runners to manage the public offering of 10 per cent of government equity in Oil and Natural Gas Corporation (ONGC).

ICICI Securities and HSBC Capital Markets have got the mandate for the GAIL offer. The advisers have been appointed in a record time of eight days from the announcement of the sale offer.

The amount that the consortium will charge the government for the ONGC disinvestment is 0.075 per cent of the sale proceeds, which is the lowest fee quoted for any market float.

While HSBC had been given the disinvestment mandate for Hindustan Petroleum Corporation Ltd, at 0.06 per cent, the offer was for a strategic sale and not a market float.

For GAIL, ICICI Securities and HSBC will charge a total 0.147 per cent. "The fee quoted for the GAIL float is twice that of the ONGC as the issue size of the gas transmission utility is likely to be one-sixth of the latter," a senior government official told Business Standard .

The Cabinet Committee on Disinvestment (CCD) cleared the proposal for market offerings of the two public sector undertakings under the petroleum ministry on December 23. The Centre aims to sell the equity in the two companies within this fiscal.

"To speed up the process further, the Securities and Exchange Board of India (Sebi) will be requested to relax the listing norms for the two floats," the official said.

The government hopes to net around Rs 12,000 crore from the two offerings.

Disinvestment Minister Arun Shourie had earlier said the capital market watchdog had also given a favourable response to the other issues planned for the last quarter of this fiscal, including the initial public offerings of Dredging Corporation of India and the sale of the government's residual stake in CMC, IBP and IPCL.