State-run Oil India's (OIL) initial public offering (IPO) has been put off by at least a month in view of the choppy market conditions.
OIL was to launch its IPO of 2.64 crore equity shares on November 10, but the reversal of fortunes on the stock markets has resulted in a rethink on its timing.
"The November 10 deadline cannot be kept. Market conditions are not right for the IPO now. I do not know when the issue will be rescheduled but it is unlikely to happen before December," a senior company official said.
"The IPO plan will has to be reworked in consultations with the government... We are keeping a close watch on market conditions," he said.
The government currently holds 98.13 per cent stake in OIL, which produces close to four million tonnes of crude oil a year. Alongside the IPO, the government plans to sell 10 per cent of its current holding in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum. Post-IPO and equity transfer, the government shareholding in the company will come down to 78.43 per cent. IOC will hold 4.45 per cent stake in the expanded equity base while HPCL and BPCL would hold 2.23 per cent each. Public holding would be 12.66 per cent.
The official said OIL had received all approvals for the IPO from market regulator Sebi and was watching market conditions.
"We have fully complied with the Sebi regulations about independent directors on the company board. We now have six independent directors on our board besides one government director," he said.
The appointment of independent directors on OIL board had been holding up the IPO since early 2008.
"We hope the market conditions will improve in the next couple of months and we are in discussions with our bankers on the exact timing of the IPO," the official said.
Due to the turbulent market conditions, several IPOs were shelved earlier, including those by realty major Emaar MGF, Wockhardt Hospital and SVEC Constructions. State-run power firm NHPC's initial offering had also been deferred earlier this month.
