ONGC approves stock split,bonus issue

Furthermore,the board approved a 1:1 bonus share issue 8212; one new share being issued for every existing equity held by shareholders 8212; as a precursor to the company8217;s planned follow-on public offer FPO in March,2011.

After the share split and bonus issue,the market value of ONGC8217;s shares will dip to around Rs 335,as against Thursday8217;s trading price of Rs 1,328 on the Bombay Stock Exchange and it is expected this will be an attractive level for retail investors to subscribe to the company.

On December 1,the Cabinet had approved sale of government8217;s 5 per cent stake in ONGC through a follow-on or further public offer FPO to raise an estimated Rs 13,000 crore.

Following the offer,the government8217;s stake in ONGC would come down to 69.14 per cent from 74.14 per cent at present.

ONGC has already appointed two international auditors DeGolyer and MacNaughton and Gaffney,Cline and Associates to certify its oil and gas reserves,a prerequisite for any exploration firm going for a public offering.

The reserve certification are expected by month end,Sharma said.

The company,which usually gets its reserves audited every five years,is getting certification done after just a three-year gap this time because of the planned FPO.