ONGC OFS opens today: Govt looks to raise Rs 3,000 crore

The Centre will sell a 1.5% stake in Oil and Natural Gas Corporation (ONGC) on Wednesday-Thursday via an offer for sale (OFS). The stake is worth nearly Rs 3,000 crore at the floor price of Rs 159/share.

The floor price is set at a discount of 7% on the oil explorer’s closing price of Rs 171.05 on the BSE on Tuesday, which was down 3.03% from the previous close.

Since the OFS will conclude only on March 31, the government will likely account for the inflows only in FY23.

“Offer for sale’ for 1.5% equity stake sale in ONGC, including 0.75% greenshoe option opens tomorrow. Retail investors can bid on Thursday,” department of investment and public asset management secretary Tuhin Kanta Pandey tweeted.

ONGC informed the BSE that the base offer size of the OFS will be 94.35 million shares with a face value of Rs 5 each constituting 0.75% of the equity of the company. The government will also exercise the option to additionally sell 94.35 million shares equivalent to a 0.75% stake in the company by retaining oversubscriptions.

“Only non-retail investors shall be allowed to place their bids on T day, i.e., March 30, 2022. While placing their bids, non-retail investors may indicate their willingness to carry forward their un-allocated bids to T+1 day for allocation to them in the unsubscribed portion of the retail category (on March 31),” the company said.

Hardening global crude prices have helped improve the earnings of the state-owned explorer, which is reflected in its stock price.

ONGC’s share price has risen by 68% on year to Rs 171 on March 29, 2022.