ONGC auction hits the mark,but down to the wire

NSE,BSE say final demand was for 42.03 crore shares,or 98.27 of the offer

After technical glitches that almost derailed the first-ever auction of shares,the government today said the offer for sale of 42.77 crore ONGC shares has sailed through. The government is estimated to have raised Rs 12,666 crore through the sale.

The auction was open for subscription for both retail and institutional investors between 9.15 am and 3.30 pm. But till 3.20 pm,the subscription figure stood at only 3.4 per cent or 1.43 crore shares. The stock exchanges NSE and BSE did not update the subscription figure after 3:20 PM. In a joint statement late evening,the two exchanges said the final demand was for 42.03 crore shares,or 98.27 per cent of the offer.

While the buy orders at both exchanges reflected a demand of 29.22 shares around the market close,there were certain buy orders which were not immediately confirmed or were erroneously rejected by custodians due to a mismatch at the custodian end,even though,the orders were funded, the statement said. These were rectified and the total demand finally added up to 42.03 crore shares.

Earlier in the evening,Sidhartha Pradhan,additional secretary,department of disinvestment,ministry of finance,told reporters there was some difficulty in uploading bids that came close to the deadline. Large number of bids came in. The system could not take it; there was a system overload. We have asked Sebi to investigate, he said. Market commentators said the episode reflected poorly on the management of the issue.

The government had avoided the follow on public offer route for ONGC to bypass the depressed and volatile market. Market experts said the issue did not elicit good investor response due to its aggressive pricing. Had the issue been priced around Rs 270 face value of Rs 5,it would have been a huge success. At Rs 290,it was higher than the days closing price of Rs 287.9, said the head of a leading global investment bank.

It seems there was some misconception among government officials they could sell the issue at such a price, said another banker,who did not wish to be identified. The banker said state-owned financial institutions LIC and SBI came to rescue the issue. Pradhan,however,said the government cannot and did not approach any institutions. It is an auction. We cannot do that, he said.