ONGC considers bonus shares, stock split

Shareholders attending Oil and Natural Gas Corporation's (ONGC) 14th annual general meeting caused a flutter when some of them shouted slogans demanding a stock split and another round of bonus shares.

In its 14-year-old existence as a corporation, the company has only issued bonus shares twice, the latest being the 1:2 bonus issue last year. Assurance from the company's Chairman and Managing Director R S Sharma to all the shareholders present, that his board would consider the suggestions at an "appropriate time" immediately pushed up the company's share price on the Bombay Stock Exchange by around 9 per cent. The stock closed the day at Rs 901.50, up 5.95 per cent on a day when the Sensex rose 4.17 per cent.

"Last year, we gave bonus and that was not the end of it. We may consider further bonus shares and share split at an appropriate time," Sharma told shareholders.

Sharma, however, said the stock split and bonus issue may not take place immediately. "A decision will be taken in due course of time," he added.

A board approval from the Navratna company "" 74 per cent owned by government "" would suffice for the split or the issue, officials said, adding that no special government sanction was required for the move.

A senior company official, however, said that after the last year's bonus issue another round of it in the near future was almost negligible, but a stock split could be considered. The shareholders also raised the issue of high attrition in the government-controlled company, and demanded employees be given more stock options for ensuring their loyalty. "That is a proposal which has been accepted. It is something we have been seriously considering," a director in the company's board said.

The number of employees in the company has dropped from 34,722 in the 2005-06 financial year to 33,810 in 2006-07. "We are working out various ways to attract talent, including through campus recruitments," said HR Director A K Balyan.