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October 13, 2008 16:13 IST
Oil India Ltd's initial public offering has been put-off by at least a month in view of the choppy market conditions.
OIL was to launch its IPO of 2.64 crore equity shares on November 10 but the reversal of fortunes on the stock markets has led to a re-think on the timing.
"The November 10 deadline cannot be kept. Market conditions are not right for the IPO now. I do not know when the issue will be rescheduled but it is unlikely to happen before December," a senior company official said.
"IPO timing will have to be reworked in consultations with the government... we are keeping a close watch on market conditions," he said.
Government currently holds 98.13 per cent stake in OIL, which produces close to four million tons of crude oil a year.
Alongside the IPO, government is to sell 10 per cent of its current holdings in OIL to Indian Oil [Get Quote] Corp, Hindustan Petroleum and Bharat Petroleum.
Post-IPO and equity transfer, government shareholding in the company will come down to 78.43 per cent. IOC will hold 4.45 per cent equity stake in the expanded equity base while HPCL [Get Quote] and BPCL [Get Quote] would hold 2.23 per cent each. Public holding would be 12.66 per cent.
The official said OIL had received all approvals for the IPO from market regulator Securities and Exchange Board of India and was watching market conditions.
"We have fully complied with Sebi regulations on independent directors on the company board. We now have six independent directors on our board besides one government director," he said.
The appointment of independent directors on OIL board had been holding up the IPO since early 2008.
"We hope the market conditions will improve in the next couple of months and we are in discussions with our bankers on the exact timing of the IPO," the official said.
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