State-owned Oil and Natural Gas Corporation (ONGC) today said it has suggested to the government that the company’s stock be split ahead of a planned follow-on public in March 2011.
“We would like that ONGC is widely held. It would be better to have more retail investors. The current price of over Rs 1,300 is a case for share split,” ONGC Chirman and Managing Director R S Sharma said on the sidelines of the Petrotech-2010 oil and gas conference here.
ONGC,he said,has sent its written recommendation for a share split to the government.
“Today,ONGC is priced at Rs 10 per share. We have suggested that it can be split into two,” Sharma added.
He said that ONGC will be ready for an FPO in last quarter of current fiscal. “We are in readiness. We know the process and will not be sound wanting.”
Besides,Sharma said the process of appointing five independent directors on the ONGC board is on and the company will shortly meet the market regulator SEBI’s listing requirements.
ONGC has six functional directors besides chairman and managing director. It also has two government appointed nominee directors taking the total strength to nine. Besides,the company currently has four independent directors and it needs five more to meet the SEBI’s listing requirements.
The government,which plans to sell 5 per cent of its shares through FPO in March 2011,expects to mop-up Rs 10,800 crore.
Post offer,the government shareholding in ONGC will come down to 69.14 per cent from current 74.14 per cent.
Last month, ONGC said it has appointed two international auditors–DeGolyer and MacNaughton and Gaffney,Cline and Associates– to certify its oil and gas reserves.
ONGC,which usually gets its reserves audited every five years,is getting a certification in the third year because of the planned FPO.