With the increased volatility and the uncertain market situations the government has decided to put the ONGC FPO on hold. The FPO has been postponed which is scheduled for a 5% stake sale of the state run oil and gas exploration company. The FPO is slated to raise Rs.12,000 crores. However the finance ministry has not declared any reasons for postponing the FPO dates as of yet. The decision is to be evaluated and the future procedures will be taken with consideration to the relevant factors surrounding the FPO. With the FPO offer the stake of the government in ONGC would come down from 74.14% to 69.14%
The shares of ONGC are currently trading at Rs.274.70 which is a rally of 5.6% from its earlier closing on Friday. With no dates declared as of yet experts believe that it is off for at least two weeks from now.
The FPO offer by the government is targeted to raise Rs.40,000 crores as a part of disinvestment plans in the current fiscal year. The primary reason sorted out for delaying the FPO procedures has been the present market conditions which is pretty volatile. Also the Global economic slowdown and the down side risk associated with slow recoveries of major European economies has been kept in mind.
ONGC’s FPO was initially planned in the 2010-11 fiscal year but due to the shortage of adequate number of independent directors the FPO was deferred. Due to the adverse market conditions it again got deferred till July 5.
Bell the Bull says: ONGC’s FPO is a much awaited offer for many of the investors