Oil India Limited (OIL), the nation’s second-largest state-run explorer, will hit the market with an initial public offering (IPO) on September 7.
OIL, which produces 3.5 million tonnes of oil annually, will offer 26.4 million equity shares (11 per cent equity) to the public, while the government will simultaneously sell 10 per cent of its stake at the IPO price to state refiners — Indian Oil Corporation (5 per cent), Hindustan Petroleum Corporation and Bharat Petroleum Corporation (2.5 per cent each). The price band of the issue, which will be open from September 7 to 11, was likely to be fixed on August 25, said a source close to the development.
Post-IPO and disinvestment, the government’s stake in the firm will decrease to 78.5 per cent from 98.13 per cent. The source said the IPO proceeds would be used to fund capex requirements for 2009-10 and 2010-11 when OIL has planned Rs 2,300 crore and Rs 2,400 crore expenditure, respectively. The OIL management is holding meetings with bankers in Mumbai and will visit Hong Kong and Singapore over the next couple of days. OIL has started discussions with bankers, including HSBC Securities & Capital Markets, JM Financial and Morgan Stanley India.
