Gail public issue put off by a month

The disinvestment ministry has decided to defer by a month the public issue for divestment of 10 per cent government equity in Gail.

It will now take place after the government divests its 10 per cent stake in Oil and Natural Gas Corporation (ONGC) in March.

This was decided at a meeting of divestment ministry officials with merchant bankers and legal advisers this evening, sources associated with the disinvestment process said.

The Gail issue, totalling 84,565,160 equity shares, is to be book-built and was slated to hit the market on February 23.

Gail was supposed to begin roadshows for its issue on February 12. The price band was to be decided a day before the issue opened.

Gail has sought the government's permission to block 5 per cent of the offering for its employees. As per Sebi provisions, 25 per cent of the shares will be reserved for retail investors.

Sebi had given clearances for the public issues of both the oil PSUs even though these do not fall under the purview of existing guidelines. Sebi is understood to have communicated to the disinvestment ministry that it will facilitate the sale of the stakes.

The government had sought certain exemptions from the market regulator, presumably a relaxation on the timing to announce the price band. Disinvestment Secretary Dhirendra Singh had gone to Mumbai last week to meet Sebi officials in this connection.

The schedule for the sale of equity in ONGC and Gail will now be sent to the group of ministers, created for the purpose by the Cabinet Committee on Disinvestment, for a verdict.

The sources said offerings would be made in February for the residual equity in IPCL and CMC, two PSUs that were privatised recently.

This would be followed for public offerings in IBP, the sources said, adding that disinvestment in state-owned Dredging Corporation would also take place simultaneously.

After the sale of the residual equity in these companies, the ONGC and Gail issues would hit the market, they added.

The draft prospectus for public offering in IBP, IPCL, CMC and Dredging Corporation, besides the draft red herring prospectus for ONGC and Gail, were filed with Sebi last week.

The government had fixed a disinvestment target of Rs 13,200 crore in the current fiscal although till November 2003, it had only mobilised about Rs 1,300 crore.

The slew of public offerings slated for February and March are expected to go a long way in bridging this gap.

Deferred issue

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• The issue was slated to hit the market on February 23
  

Sebi has already cleared the public issue

The company was supposed to begin roadshows on February 12

Offerings for the residual equity in IPCL and CMC to be made this month