New Delhi, Mar 30 (PTI) The government’s sale of 1.5 per cent stake in ONGC on Wednesday saw institutional buyers putting in bids worth Rs 4,854 crore — three and half times their quota — but the company’s share took a beating on stock exchanges, falling 5.14 per cent and eroding shareholders’ value.
The government is selling 9.43 crore equity shares in India’s top oil and gas producer at a floor price of Rs 159 apiece, with an option to retain an equivalent amount of over-subscription.
The two-day Offer-For-Sale (OFS) was opened to institutional investors on Wednesday. Against 8.49 crore shares reserved for non-retail investors (16.98 crores together with greenshoe option), 30.35 crore shares or 357.44 per cent more, were sought, according to stock exchange data.
At the indicative price of Rs 159.91 a share, bids by the institutional investors are worth Rs 4,854 crore.
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted that the OFS of government equity in ONGC has received an “enthusiastic response” from the non-retail investors.
“The issue was subscribed 3.57 times the base size. The government has decided to exercise the green-shoe option,” Pandey tweeted.
The OFS will open for retail investors on Thursday. As many 94.35 lakh shares (1.88 crores with greenshoe option) are reserved for retail investors.
The government has priced the OFS at a 7 per cent discount to the Rs 171.05 stock closing price of ONGC on BSE on Tuesday. And on Wednesday, the stock further fell to Rs 162.25.
The fall in stock price translates into a loss of market capitalisation of over Rs 11,000 crore. For the government, the loss at 60.41 per cent shareholding is little less than Rs 7,000 crore.
Through the OFS, the government is targeting to raise Rs 3,000 crore. And going by the stock price, it lost more value than it gained.
Minority shareholders lost over Rs 4,000 crore and employees run the risk of losing a part of their performance-related pay (PRP) as market capitalisation is one of the key parameters of evaluation in 2021-22, industry sources said.
So far in the current fiscal, the government has mopped up Rs 12,423.67 crore through OFS, employee OFS, strategic disinvestment and buyback. This is against the disinvestment target of Rs 78,000 crore for the current fiscal. PTI JD ANZ ANZ RUJ RUJ
