State-owned gas transportation company, Gas Authority of India Ltd has proposed a global depository receipt issue of 2.5 per cent of its equity shares.

"We had GDRs to the extent of 16 per cent but companies like BG and Templeton have offloaded their GDRs in the domestic market. Today our GDRs have come down to eight per cent", GAIL chairman and managing director Proshanto Bannerjee told PTI.

He said the GDRs have been proposed in case domestic retail investors do not subscribe to the public offering of 8.4 crore (84 million) equity shares planned by the government in March.

"We would like to watch the public issue of Oil and Natural Gas Corporation, CMC and IBP, which will hit the market before out public issue slated for March 15. In case retail investor is short of funds, the government can go in for GDRs," he said.

Gail has already written to the ministry of divestment suggesting a GDR issue.

"In our estimate institutional investors will definitely pick up their quota of 50 per cent of the public offering but retail investor may face a fund constraint after mega issues of ONGC, IBP, CMC and IPCL", he said.

Out of the 10 per cent public issue, 50 per cent has reserved for retail investors and the remaining for institutional buyers.

GAIL estimates that half of the shares reserved for retail investors may only be subscribed in the public offering next month.