Blue Chip SAIL, IOC and ONGC will hit market in New Calender Year

by khalid on 20/10/2010 · 4 comments

The government proposes to raise Rs. 40,000 crore from sale of equity in the public sector undertakings in the current fiscal. And for achieving this target the government will come up with IPOs of three blue chip companies namely SAIL, Indian Oil and ONGC. These IPOs will hit the capital market in the last quarter of the current fiscal FY10-11.

The details of the public issue of petroleum major Indian Oil Corporation (IOC) will be decided shortly as the RFQ (Request for Qualification) for appointment of merchant bankers will be issued shortly. The government is very much hopeful of achieving the target of Rs 40,000 crore.

These three IPOs are very large and they will generate money from market in a single quarter as government is of the view that there is an enormous appetite in the market. The government will not go ahead with the public issues of the trading company MMTC and steel producer Rashtriya Ispat Nigam Limited (RINL) in the current fiscal. These two IPOs will come up in the next fiscal.

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Taheri October 24, 2010

When is the secondary IPO for SAIL and ONGC projected? CIL market price as suggested by the Finance Ministry was around Rs 225-Rs. 245, what do you guess would be the price of ONGC and SAIL. What will become of the existing stockholhers holdings in these two equities. If 85% of SAIL is government owned and ~5% by the major institutions, off the balance 9% how much is held by the big bosses of India? Have read some articles that projected the BSE price of SAIL to be in the range of around $ 200.00 and the stock to be split 4 to 1. Govt. wants to ensure thet stll keep over 75% ownership of SAIl. If Rs. 40,000 crore is to be raised., then at at Rs. 10 par value the govt. will have to issue approximately 400,000 crore shares. Would that not make it the largest stock offering in Indian history.

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khalid October 24, 2010

Hi Taheri
IPO for SAIL and ONGC will come up in Jan to Mar 2011 quarter. What do you mean by big bosses, they would have holding from 9% which is available in market at present. Rs. 40,000 crore is not for SAIL only and so your calculation is wrong that it will be the largest IPO.

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Taheri October 24, 2010

What us the rotal outstanding share volume of SAIL and ONGC? If the the objective is to raise Rs. 400,000 crore and if IPO is priced at initial Rs. 10,of the 4,000,000 crore shares thegovt if it stll wants 80% holdings will own 3,200,000 crore shares. Institutions will hold 200,000 crore shares abd the baance will be sold retail to the public..

The question remains if SAIl management’s objective is to raise the Rs. 400,000 crore from te investors, or the investors plus the goverment.

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khalid October 24, 2010

Hi Taheri
SAIL divestment will be for Rs 16000 crore or so and IPO will not be offered for Rs 10, its face value will be Rs 10 and premium will be charged as per market condition.

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