OIL India FPO: A Step Toward The Target
Shailendra Lotlikar / 17 Jan 2013
The government seems to be acting fast towards achieving its set target of mopping up Rs 30000 crore from the divestment process this year. A stake in Oil India is what it will give up in that direction. Here is what it is up to in the Oil India case and what you should be knowing about the company before you look at investing in it.
The Government of India is all set to offer a 10% stake in Oil India to the public this month. After the divestment of Hindustan Copper and NMDC, Oil India is the next in line to be offered to public ownership. This is another step towards achieving the target of raking in Rs 30000 crore through disinvestment of PSUs by March 2013.
Currently, the Indian government holds 78.48% in company and the remaining 21.57% is held by others. After the 10% stake sale, the government’s holding will reduce to 68.48% in it. Through the 10% stake sale, it is expected to sell 5.4 crore shares and will generate around Rs 2700 – Rs 2900 crore. The government has appointed three merchant bankers to carry-out the FPO process in case of Oil India.
Oil India is a company which has over 100 years of experience in oil and gas production. Its product range includes crude oil, natural gas and LPG and it also provides pipeline services. Oil India has large production capacities mostly in North India. Its Rajasthan facility produces 10% of its total gas production. Today, Oil India is the third best in the energy sector in PSUs, and among the five best PSUs in India. As of now, the company is the second largest national upstream oil and gas PSU. Currently, its market capitalisation is a little over Rs 29800 crore.
There are three major factors which will attract investors towards this FPO. These are; very low debt of just Rs 10.18 crore on the company’s Balance Sheet, high reserves of Rs 17480 crore and a strong existence in this field.
On Tuesday, oil India reported that it has started drilling operations in Gabon, South Africa. The company has also announced its early production from Venuzuela. Oil India's Venezuela field has started production from 27th December 2012, which is much before its declared date. These developments are very good signs for the company. All these factors may attract investors towards the FPO of this company. For a detailed analysis visit this space and we will tell you the more specific details of the offer that the government comes up with.
If you want to stay updated with the share market news today, keep a close watch on the indian stock market today with real time movements like sensex today live and overall stock market today trends. Investors tracking ipo allotment status, ipo news today, or the latest ipo india can also follow daily updates along with bse share price live data. Whether you are learning how to invest in stock market in india, preparing for a market crash today, or searching for the best stocks to buy in india, insights on top gainers today india, top losers today india, trending stocks india and long term stocks india help in making informed investment decisions.