Six bankers in race for ONGC, GAIL float mandate

Six merchant bankers are in the fray for bagging the mandate for the big ticket floats of the Oil & Natural Gas Corporation (ONGC) and GAIL India.

J M Morgan Stanley, Kotak Mahindra Capital Company, DSP Merrill Lynch, ICICI Securities and HSBC Securities & Capital Markets India have submitted bids for both floats. In the case of GAIL, Enam too has submitted a bid.

"The government will announce who has bagged the mandate within this week, possibly even tomorrow (Wednesday)," sources familiar with the development said.

The government is in a hurry to meet the disinvestment target of Rs 13,200 crore this fiscal and the ONGC and GAIL floats are expected to contribute to the overwhelming chunk of this amount. The government has so far gathered only Rs this year as the big ticket divestment of Hindustan Petroleum Corporation did not materialise following a Supreme Court ruling.

It was only last week that the Cabinet Committee on Disinvestment decided on public float of the two companies which is expected to fetch around Rs 12,000 crore.

The Union government has moved fast since then. It did away with the usual practice of inviting presentations from merchant bankers and directly invited bids from a select group this time.

The public float of the two energy majors will be through the book-built route. Also on the anvil this year is the divestment of the government's residual stake in disinvested companies like IBP, CMC and Indian Petrochemicals Corporation (IPCL).

Further, the public float of the Dredging Corporation of India too is expected to hit the markets. After the success of the Maruti IPO this year, book-built routes have become the flavour of the season.