Retail discount likely even in GAIL float

After IPCL and IBP, retail shareholders are likely to avail of a discount in the forthcoming public issue of GAIL India.

GAIL chairman and managing director Proshanto Banerjee told Business Standard that retail investors could get the same benefit in the case of pricing of public issues of IPCL, Oil and Natural Gas Corporation (ONGC) and GAIL.

"I presume uniformity will be maintained by the government in case of stake sale in IPCL, ONGC and GAIL," he said. However, he added that the final decision will be taken by the disinvesment ministry.

The centre on Wednesday offered 5 per cent discount to retail bidders over the discovered price arrived through book building route. The floor price of the offer was fixed at Rs 170 a share.

However, industry sources said the discount in case of the GAIL issue will not be 5 per cent, as it was for IPCL.

"The GAIL stock has been traded Rs 30 higher than IPCL. Therefore, the Central government might offer lesser discount in case of the GAIL issue to keep the rebate in monetary terms same," a senior stock broker said.

The GAIL issue would offer 8.45 crore shares for sale through book building process. Retail shareholders would be entitled to bid for 25 per cent of the offer , or 2.1 crore shares.

The government is offering residual stake for sale in IBP, CMC, IPCL and 10 per cent each in ONGC and Gail.

All the public issue will hit the market during end February and March.