Common float: Action begins on ONGC float

Top government officials disclosed that seven potential legal advisors, of which two are renowned international legal firms, have submitted their bids. ‘‘Big names in the panel includes Amarchand and Mangaldas, Dua Associate, Crawford and Bailey and Luthra and Luthra. In all, there are around five domestic and two global firms. Bids by these renowned legal firms will be opened on Monday by IMG,’’ they said.

IMG comprises of secretaries from the ministries of disinvestment, finance, petroleum, law, department of public enterprises besides the chairmen and finance directors of ONGC and Gail.

IMG will make its recommendations to the high level group of ministers, constituted by the Cabinet Committee on Disinvestment for speedy clearance of various decisions.

Sources said the legal advisers will have a major role to play in the public offerings of ONGC and Gail. This is because the merchant bankers are of the view that the prospectus for the domestic offerings in the two PSUs should match the quality of prospectus prepared for a GDR offering. ‘‘The same was done in case of the public offering in Maruti Udyog Limited. The quality of GDR prospectus is far superior as there are more disclosures which generates better investor confidence…Legal advisors will play a very crucial role here as this being a very big offering, they will not just carry out due diligence but will be writing the entire prospectus,’’ they added.

Sources disclosed that the first kick-off meeting of ONGC and Gail with their respective merchant bankers started on Saturday where various issues related with the statutory audit of accounts of the companies, quantum of offerings to different category of investors including foreign institutional investors (FIIs), financial institutions, mutual funds along with the details of the roadshows to be conducted in domestic and global markets was discussed.

Discussions on the timeframe for filing of the prospectus was also discussed in the meetings with the merchant bankers. Sources said ONGC and Gail plan to file the prospectus before the Securities and Exchange Board of India (Sebi) by January end and the final prospectus before the Registrar of Companies (RoC) by February 15. Thereafter the roadshows will be conducted in various countries for the issue, sources said.

Sources said although the exact details are still being worked out, it has been broadly agreed that 50 per cent of the retail offering by ONGC and Gail will be made to foreign institutional investors (FIIs), 25 per cent to retail investors and the balance 25 per cent to other category of investors including high networth investors and Indian corporates.

In order to give adequate details to the investors, ONGC has decided to include in the prospectus its accounts till December end. “Even if ONGC had included its accounts till September end, it would have complied with the legal requirement of a public issue as per which the accounts should not be six months old. However, despite the fact that will be a big strain on their resources, ONGC is getting statutory audit of their accounts till December end. This shows their commitment to the investors,” a leading merchant banker commented.