ONGC Files RHP for FPO: Issue likely to raise over Rs 10,500 crs. Expected opening 20th September

ONGC has filed its RHP for its forthcoming FPO (follow on public offer). The issue is to open on Tuesday the 20th of September and will close on Thursday the 22nd of September for QIB’s and for all other investors on Friday the 23rd of September. The issue size where the Government of India will be the only seller and will reduce its holding from the present 74.14% to 69.14%.

The issue is for 42,77,74,504 shares and has a reservation of 85,53,168 shares for employees. The net offer is 41,92,21,336 equity shares which would be offered in a ratio of 50% for QIB’s, 15% for HNI’s and 35% for retail investors. There will be a discount for employees and retail which would be announced along with the price band one day before the issue opens. In all probability the price would be announced over the weekend.

The closing price on Tuesday the 6th of September is Rs 260.95. Assuming the same as the FPO price the size of the offering is Rs 11,162.77 crs. Considering that there would be a discount to employees and retail and also some discount to the current market price one can assume the issue price as Rs 250 and a discount of Rs 12 to retail and employees. The total size of the issue would then get reduced to Rs 10,525 crs. Whichever way one looks at it this would be the first big issue in the current year to hit the market place in the current year 2011-12. The success of this issue would prompt many others to tap the capital market in the near future.

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