Oil India, the second state-run firm to hit the market with an offering of equity shares this year, may price its IPO that opens on September 7 at Rs 1,000-1,100 a share.
OIL is looking at pricing its initial public offering (IPO) at closer to the prevailing share price of Oil and Natural Gas Corp (ONGC), a source close to the development said.
ONGC, the nation's largest explorer, was trading at Rs 1,167 on the Bombay Stock Exchange (BSE) at 1400 hours on Monday.
OIL, the source said, believes its earnings per share (EPS) and book value are better than ONGC and so it is looking at pricing the issue in the range Rs 1,000-1,100.
The price band will, however, be fixed by a Group of Ministers in the last week of August.
The IPO, the second after the highly successful offering by hydroelectric power generator NHPC, will open on September 7 and close on September 11. OIL will be listed on the bourses on September 29.
The OIL management is currently holding an investor meeting in Hong Kong and Singapore.
OIL, which produces 3.5 million tonnes of oil annually, will offer 2.64 crore equity shares or 11 per cent to the public through the IPO, while the government will simultaneously sell 10 per cent of its stake in the company to state refiners.
Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 per cent to around 78.5 per cent.
The source said the IPO proceeds would be used to fund the capex requirement of Rs 2,300 crore for 2009-10 and Rs 2,400 crore for 2010-11.
OIL was to launch its IPO of 11 per cent equity on November 10, 2008, but the stock market downslide led to the postponement of the plan.
Alongside the IPO, the government will sell 10 per cent of its current holding in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum.
IOC will get about 5 per cent while HPCL and BPCL would take about 2.5 per cent each.
The public holding will be about 12 per cent.
