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Warren Buffett invests $1 billion in ONGC issue

Agencies | March 05, 2004 16:11 IST
Last Updated: March 05, 2004 16:14 IST

Warren Buffett, billionaire stock market investor and Berkshire Hathway Inc chief executive officer, is said to have invested $1 billion in the public issue of the Oil and Natural Gas Corp, according to lead managers, reported the Crisil MarketWire on Friday.

"Warren Buffett has put $1 billion or roughly Rs 4,530 crore (Rs 45.30 billion) in the ONGC public offer and this also happens to be his first investment in India," Crisil quoted a senior official at one of the lead managers to the issue as saying.

"The investment is almost half the size of the issue," reported Crisil.

The government's mega offer to sell its 10 per cent stake in ONGC was oversubscribed by 1.07 times within 45 minutes of opening of the bidding process.

However, the price at which Buffett, the world's second richest man, made his bid is not known though merchant bankers said that bulk of the bids from institutional investors have come at the lower end of the price band at Rs 680, said Crisil.

The government on Wednesday fixed a price band of Rs 680 to Rs 750 per share for divesting 10 per cent equity in Oil and Natural Gas Corporation through a mega public offer of 14.26 crore (142.6 million) shares.

It has also decided to offer a discount of 5 per cent to retail investors.

As much as 10 per of the offer would be reserved for shareholders of ONGC and MRPL, excluding government, IOC and GAIL, and another 10 per cent for employees and wholetime directors of ONGC.

The remaining 11.40 crore (114 million) shares would be offered to qualified institutional buyers, non-institutional investors and retail investors.

The issue is likely to mop up about Rs 10,700 crore (Rs 107 billion). The issue is the biggest in Indian capital market history and it closes on March 13.

The public issue is being lead managed by DSP Merrill Lynch Ltd, J M Morgan Stanley Pvt Ltd, and Kotak Mahindra Capital Company.

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