ONGC auction flops, bids for 29.22 cr shares against 42.77 cr
The announcement follows a dramatic day that saw confusion prevail over numbers.
The auction for the sale of the government's 5 per cent stake in ONGC turned out to be a flop show. The government received bids for 29.22 crore shares out of 42.77 crore shares on offer at market close on Thursday, according to ONGC chairman Sudhir Vasudeva.
If the share sale is priced at the day's close of Rs 287.85, the government can hope to get Rs 8,410 crore through the sale against an estimated Rs 12,500 crore. The issue
The bidding process was slow with bids for about 1.43 crore shares received till the end of the trading session. After the market close at 3.30 pm, the total bid size was arrived at 29.22 crore. It is not yet clear who has subscribed to the offer.
According to a managing director of a hedge fund based in Mumbai, state-owned financial institutions could have bid the maximum. Life Insurance Corporation of India and State Bank of India had expressed an interest earlier.
ONGC shares fell 1.9 per cent to Rs 287.
The bids have been mostly in the price range of Rs 291-293 per share for the auction, under which the government has proposed to sell about 42.77 crore shares. The auction commenced at 0915 hours and would close at 1530 hours today.
The government has fixed a floor price of Rs 290 per share for the share sale through this one-day auction, wherein it is targeting to raise about Rs 12,000-13,000 crore.
At 1245 hours, bids had come in for a total of 47.7 lakh shares.
The early morning bids had come in the price range of Rs 292-294 a piece, but the price fell to Rs 291-292 by late morning.
In the first hour of auction, bids had come in for about 37,500 shares, while it rose to about 1.7 lakh by the end of second hour of the bidding.
The bidding picked up momentum by the mid-day and bids for more than 10 lakh shares had come in at 1200 hours.
Investment bankers said that the bidding was expected to gain further ground in the last 2-3 hours.
After an initial spike of about one per cent, ONGC share prices had turned weak and was trading 0.6 per cent down at Rs 291.50 at 1250 hours. The stock price has remained above the floor price of Rs 290 and had touched a high of Rs 296.50 within minutes of market opening this morning.