The government will sell around 190 million shares in ONGC at a floor price of INR159 ($2.1) through an offer for sale (OFS), which will include a greenshoe option
ONGC Oil and Gas Processing Platform at Bombay High in the Arabian Sea. (Credit: Nandu Chitnis/Wikipedia)
The Indian government is set to divest a 1.5% equity stake in its oil and gas producer Oil and Natural Gas Corporation (ONGC) to raise around INR30bn ($396m).
It will sell around 190 million shares in ONGC at a floor price of INR159 ($2.1) through an offer for sale (OFS), which will include a greenshoe option.
The OFS will include the sale of 94.3 million shares or 0.75% stake in ONGC to non-retail investors, said ONGC in its stock exchange filing.
Also, the offer facilitates the sale of additional 94.3 million shares constituting 0.75% stake in ONGC to retail investors.
With the divestiture, the government of India’s ownership interest in ONGC will be reduced to 58.91%, from the current 60.41% in the company.
ONGC said that the it has reserved equity shares representing 0.075% equity in the company, for its eligible employees, who can apply for shares worth up to INR500,000 each.
A minimum of 25% shares have been allocated for mutual funds and insurance companies, and a 10% for retail investors.
The divestiture is part of government of India’s divestment target of INR780bn for FY22, of which it has achieved only INR120bn divestment receipts this year.
Earlier this year, ONGC Videsh (OVL), the wholly owned subsidiary and overseas arm of ONGC, has entered the development stage for BM-SEAL-4 deep offshore block in Brazil.
OVL has initially made a major gas discovery in BM-SEAL-4 block located in the Sergipe Alagoas Basin in 2019.
It has submitted the declaration of commerciality (DoC) for the deep offshore block, following the detailed assessment.