The country’s biggest petro marketing company, Indian Oil Corporation (IOC), expects to sell its shares at around Rs 450 each in its follow-on public offer (FPO) expected early next year, Chairman B M Bansal told reporters here.
Reacting to this, the share price of the government-owned company touched an intra-day high of Rs 395.75 at the Bombay Stock Exchange and closed at Rs 384.10, up 11 per cent from the previous day.
Bansal said the FPO, in which the government would divest 10 per cent of IOC equity (it presently owns nearl;y 80 per cent), along with the company selling an equal number of freshly issued shares, was likely in the third or fourth week of January.
The company has hired six banks, including Merrill Lynch, Citigroup and ICICI Securities, to handle the public offer. Morgan Stanley, SBI Capital and UBS are the other banks. Bansal said the FPO would raise about Rs 20,000 crore, half each for the government and the company.
The share sale proceeds would help IOC revive petrochemical projects in the eastern state of Orissa and the western state of Gujarat, as well as a 2.5-million tonne LNG terminal and an associated 1,000-Mw power unit in Ennore, Tamil Nadu.
The company had been forced to put on hold a petrochemical plant at Paradip in Orissa, one at the Koyali refinery in Gujarat and the LNG terminal at Ennore due to stressed finances caused by losses due to sale of petrol, diesel, LPG and kerosene at government-controlled prices.
The government plans to sell shares in IOC and Oil and Natural Gas Corporation (ONGC) as part of its effort to raise Rs 40,000 crore this financial year to fund social and infrastructure projects and reduce its fiscal deficit. The stake sale from ONGC may raise Rs 14,500 crore. Currently, the government owns 74.14 per cent in ONGC and 78.92 per cent in IOC.
