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Oil India IPO Overbid

The furious pace of subscriptions signaled a still vibrant investor sentiment

Setting aside all fears that the initial public offering (IPO) of state run Oil India may run into heavy weather after the lukewarm reception given to the ones unveiled by state-run NHPC and private entity Adani Power, the investors virtually lapped up the issue by over 1.27 times – the final tally is awaited.

Most of the subscriptions came at the higher end of the price band (Rs 1,050 a share).

This was the second stake sale (divestment) in a government-run organization in recent weeks, after NHPC’s.

Oil India is eyeing raising of Rs 4,982 crore (at the ceiling rate) via the IPO, slated to close on September 11 and the listing has been scheduled for September 29.

Oil India is the country’s second-largest state run explorer and produces 3.5 million tons oil annually. It is engaged in exploration, development, production and transportation of crude oil and natural gas onshore in India.

Oil India has been accorded the status of Miniratna by the Government of India. Its relatively smaller size can be gauged from ONGC being ten times its size.

Oil India is offering fresh equity of 2.64 crore shares or 11 per cent. At the same time, the government offer 10 per cent of its stake in Oil India to other state-run refiners.

The government is looking to earn anything between 2,205 crore. Oil India will get Rs 2,777 crore, calculating at the upper band.

The dilution of the state’s stake will not amount to much as it will fall, post-IPO from 98.13 per cent to 78.50 per cent.