Future auction issues to be restricted to single exchange, says divestment ministry official
Divestment additional secretary Siddharth Pradhan said LIC will now get a seat on the ONGC board.
The empowered Group of Ministers (eGoM) will meet on 19 March to discuss the initial public offering of the National Buildings Construction Corporation (NBCC), Siddharth Pradhan, Additional Secretary in the Department of Disinvestment told NDTV Profit.
The government will also go with a single exchange for its next auction issue, Pradhan said, adding that allowing the auction on both the Bombay Stock Exchange and the National Stock Exchange for the ONGC stake sale added to the confusion.
There were widespread complaints during that share auction that a number of bids had been rejected for no apparent reason.
Pradhan said the government had gained about Rs 1900 crore by offering the oil-and-gas major’s shares at Rs 290 each, which was at a premium over its last trading price. Most investors stayed away from buying the stake; finally, the government had to ask the Life Insurance Corporation to step in to save the day. As a result, LIC had to pick up most of the shares on offer.
However, Pradhan said the government is still awaiting data from the exchanges on the names of the investors and their participation.
He also said that LIC had invested in ONGC expecting a handsome dividend payout in the long run, adding that the country’s largest insurer was now eligible for a position on the ONGC board.