Govt is going to get the money within no time since ONGC performing very well for the past several years.
Finally a panel of Ministers has approved selling 5 % Equity in State run Oil and Natural Gas Corp through a Share auction, Oil Minister Jaipal Reddy said today. They have given up on the book building method and have adopted the auction method, which SEBI has released guidelines just about a month back and this will be a special window on promoter stock exchanges.
Even for the government it's going to be the first time that they are going to actually go ahead with this process. Jaipal Reddy hinted that the auction will be in the next couple of days. Sources say the auction is slated for the March 1. Experts and analysts say that the floor price is expected to be about 5-7% lower than the prevailing market price. It is going to be a closed price that's going to be sent in a sealed envelope to stock exchanges and it's not going to be revealed. The Govt will not sell beyond the floor price.
Also, investors would have the opportunity to revise the prices through the day and in interactions with exchanges expect for the last one hour when prices will not be allowed to be revised and this will be open to all investors. So, it will also be open to retail investors other than institutional investors. The government is finally looking at getting about Rs 10,000-12,000 crore from this auction Govt will fetch the amount within no time since ONGC is performing very well for the past several years.