Twice deferred,ONGC FPO to hit market on Sept 6

Its finally on. ONGCs follow-on public offer which has been deferred twice this fiscal year will kick off on September 6 with the first roadshow at New York and the issue scheduled for opening on September 20.

Its finally on. ONGCs follow-on public offer which has been deferred twice this fiscal year will kick off on September 6 with the first roadshow at New York and the issue scheduled for opening on September 20.

At the likely price of Rs 285 a share,the 5 per cent or 427.77 million shares would fetch the government Rs 12,192 crore,sources said. The red herring prospectus (RHP) for the FPO would be filed on September 5.

The board of Oil and Natural Gas Corporation (ONGC) approved the RHP on August 29 after incorporating the companys financial results for the April-June quarter,chairman and managing director AK Haziraka told reporters here.

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However,though he claimed that the dates had not been confirmed by the Department of Disinvestment,an August 29 instruction from the department deputed two teams for the international roadshows in New York,Boston,San Francisco,Singapore,Hong Kong and London.

The FPO was originally planned for fiscal 2010-11,but was deferred to April 5 as the state-run explorer did not have adequate independent directors on its board to meet market regulator Sebis listing norms. It was then rescheduled for July 5,but was again deferred due to adverse market conditions.

While these and the royalty issue of the Rajasthan oil fields have been resolved since then,the subsidy sharing mechanism which casts uncertainty on the net profits remains unclear.

But Hazarika claimed he expected the upstream burden to be lower at one-third of the revenues loss on fuel sales. After the FPO,the governments stake in ONGC will come down to 69.14 percent from the current 74.14 percent.