Oil India May File IPO Papers By Mid-Nov

Kolkata: Oil India Ltd (OIL) may submit the draft red herring prospectus, for its proposed IPO, for SEBI clearance in mid- November, according to sources. The company is expecting the issue to be opened in February.

Meanwhile, the Union Ministry of Petroleum and Natural Gas recently approved the proposed appointment of seven independent directors on board to help OIL to confirm to the clause 49 of the listing agreement.

Accordingly, the search committee under the Public Enterprises Selection Board (PESB) has started the process of selecting the suitable candidate. “Though normally the process takes three to four months, we are hopeful of appointment of independent directors as early as in November,” a company source said.

It may be mentioned that the Cabinet Committee of Economic Affairs had approved fresh issue of 10 per cent of OIL’s paid-up capital through IPO. This apart, the company will also issue an additional one per cent capital to the employees.

Also, the Government will disinvest 10 per cent of OIL’s paid-up capital in favour of IndianOil, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). While IOC will pick up five per cent stake in OIL, BPCL and HPCL will get 2.5 per cent stake each in the upstream company.

The price band to be discovered for the IPO will be applicable on the disinvestment. While the IPO is expected to generate resources to the tune of Rs 1,430 crore for OIL, the government may raise an identical sum through the disinvestment.

Following the Cabinet approval, OIL has appointed HSBC, Morgan Stanley and Citibank as lead managers to the proposed IPO.

“We are expecting to file the DRHP by mid-November,” the source said adding that once SEBI approves the proposal, OIL will go back to the Centre to decide the issue price.