State-owned oil explorer, Oil and Natural Gas Corporation (ONGC), has finally withdrawn its share sale document for its follow-on public offer (FPO) on Tuesday.
In an interview to NDTV Profit, ONGC Chairman Sudhir Vasudeva said, “Withdrawal of Red Herring Prospectus (RHP) does not lead to cancellation of the FPO. We withdrew the share sale document because the 90-day validation ends in November.”
Vasudeva further said that the company is in a process of appointing three independent and two functional directors. “ "If and when required, we will file it again, but the timing will have to be decided by the Department of Disinvestment,” he clarified.
ONGC’s follow-on public offer has been delayed for a long period of time as the company did not have an adequate number of independent directors on the board. The FPO was then planned for July 5 but was deferred due to the same reason. ONGC has six functional directors besides the chairman. It also has two government-appointed nominee directors, taking the total strength of functional or promoter directors to nine.
Later, the FPO was scheduled to hit markets on September 20 and the road show was supposed to begin on September 5, but was deferred again.
The government is selling 5 per cent or 427.77 million shares through this follow-on public offer in a bid to to raise at least one fourth of its Rs 40,000 crore divestment target for the current fiscal. ONGC FPO may have fetched approximately Rs 12,000 crore to the government. Post-FPO, the government's stake in ONGC would come down to 69.14 per cent from the existing 74.14 per cent.
Shares of ONGC rose 1.9 per cent to Rs 253.50 on the Bombay Stock Exchange on Monday.
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