Despite volatility in domestic and global bourses, the Centre is set to sell 10 per cent stake in the country’s largest oil refining and marketing company — Indian Oil Corporation on August 24 that is expected to raise over Rs 9,500 crore.
“The President of India… has submitted to BSE a Notice of Offer for Sale 24,27,95,248 equity shares of face value of Rs. 10 each of the company (“Sale Shares”), aggregating to 10 per cent of the total paid up equity share capital of the company,” said the firm in a filing to the stock exchanges.
The floor price for the offer for sale is likely to be announced on Saturday. Disinvestment secretary Aradhana Johri told reporters that the 20 per cent of the OFS would be reserved for retail investors. “We see an excellent appetite for IOC stock right now. We have received good feedback from merchant bankers,” adding that the government has a very robust pipeline of stake sales this fiscal.
The 10 per cent stake sale in IOC, the fourth in this fiscal, is likely to help raise over Rs 9,500 crore based on its current share price. The IOC scrip fell 0.7 per cent to close the day at Rs 394.45 apiece on Friday.
The Centre currently holds 68.57 per cent stake in the oil PSU and post disinvestment, its holding will reduce to 58.57 per cent, lessening chances of further large stake sales in the company. The Union Cabinet had approved the stake sale in IOC in May this year and the department of disinvestment had appointed merchant bankers for the stake sale earlier this month, including Citi Group, Deutsche Equities, Nomura, JM Financial and Kotak Securities.
Meanwhile, the five per cent stake sale in Dredging Corporation of India was subscribed 2.65 times with heavy participation from retail investors and would help raise about Rs 53.48 crore for the Exchequer. Significantly, the OFS registered heavy interest from retail investors for whom 10 per cent of the issue size of 14 lakh shares was reserved. The portion was subscribed 11.64 times, receiving 16.4 lakh bids.
“The retail response is very encouraging,” said Johri, adding that the OFS received total bids worth Rs 142 crore. Meanwhile, despite heavy volatility in domestic bourses, the non-retail portion of the OFS was also subscribed 1.65 times, according to data available with the BSE.
‘In talks with Sebi on PSU ETFs’
Disinvestment secretary Aradhana Johri said the finance ministry is in talks with Sebi on the planned exchange traded fund of stocks of public sector units for this fiscal. She further said that the department of disinvestment has not finalised merchant bankers for the proposed 5 per cent sale in NTPC.