ONGC slumps over 4% after Govt decision to sell 1.5% stake through OFS

30 Mar 2022 , 02:25 PM

Shares of ONGC plunged over 4% and were among the top Nifty 50 loser in the index. The stock came under the limelight after the government is all set to raise Rs3,000 crore from its stake sale of 1.5% in the company. As the offer for sale (OFS) to open on March 30 and 31, according to a regulatory filing.

The floor price for the Offer shall be Rs159 per Equity Share (“Floor Price”). The Stock Exchanges are required to ensure that the Floor Price is immediately informed to the market, the company said.

Oil & Natural Gas Corpn Ltd (ONGC) is currently trading at Rs163.15 down by Rs7.9 or 4.62% from its previous closing of Rs171.05 on the BSE.

In the OFS, a minimum of 25 per cent of the shares are reserved for mutual funds and insurance companies, while 10 per cent is earmarked for retail investors. The government, which owns over 60 per cent stake in ONGC, is the promoter selling 0.75 per cent of the total paid-up equity share capital, or up to 94,352,094 equity shares of the company, of its stake in the company.

The bids are open to non-retail investors today and retail investors (who are defined as investors who bid for not more than 2 lakh shares) tomorrow, and if oversubscribed, it has kept the option to sell 94,352,094 equity shares additionally.

The OFS comes a day after ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corp, sold at least one cargo of Russian Sokol oil to state refiners Hindustan Petroleum Corporation and Bharat Petroleum Corporation after failing to draw interest in a tender earlier this month.

In the filing, the company said “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 Retail Category (defined below).”

The Offer shall continue to take place during trading hours on a separate window of the Stock Exchanges on T+1 day, i.e., March 31, 2022 commencing at 9:15 a.m. and shall close on the same date at 3:30 p.m. Indian Standard Time on the same date, it added.