Cash strapped government today garnered Rs 3,100 crore from sale of 10% stake in Oil India (OIL), which was a resounding success with the issue being lapped up by more than twice the number investors originally targeted.
Nearly a year after India's biggest explorer ONGC's issue almost flopped, the OIL issue was fully subscribed even before the close of market hours. The issue got bids for 15.41 crore shares as against 6.01 crore on offer.
While ONGC issue in March last year went past with help from state-owned LIC, OIL was lapped up by retail investors in numbers that were unseen during the previous three government auctions in ONGC, Hindustan Copper and NMDC.
The OIL share sale got the highest bid at Rs 527 a share, a 3.33% more than the floor or auction start price of Rs 510. The median bidding price was, however, was at Rs 517.99, lower than the Rs 525.55 closing price on the BSE.
At this median bidding price, the government would garner Rs 3,113.80 crore.
"OIL issue was lapped up by investors across the board with widespread participation from institutions including FIIs, mutual funds, non-institutions and substantial participation from retail investors," a disinvestment department official said.
LIC, SBI MF, HDFC MF and other financial institutions participated in the OIL share sale offer as they are "very positive on oil and gas sector".
Bids for over 7.50 crore shares were with 100% margin, meaning if the bidder decides to withdraw later they can do so. Bids that came in with zero% margin were over 7.91 crore shares, according to the NSE data.
With the OIL stake sale, the total realisation from disinvestment in the current fiscal has gone up to over Rs 10,000 crore. The government has budgeted Rs 30,000 crore to come from disinvestment in the current fiscal.
The government holds 78.43% stake in the company which would come down to 68.43% after disinvestment. OIL's paid-up capital as on March 2012 was Rs 601 crore.
OIL got listed on stock exchanges in 2009.
As on March 31, 2012, the company had employee strength of 8,096.
In a statement, BSE said prior to the OIL issue, 21 companies including three PSUs have successfully completed their equity offer for sale issues through BSE OFS mechanism.
These private companies include Wipro, Adani Enterprises and D B Corp.
