ONGC shares slip 5% to become Nifty50 top loser as government announces OFS

Shares of Oil and Natural Gas Corporation Limited (ONGC) slipped nearly 5 per cent on Wednesday to touch the day’s low of Rs 162.85 per share on the BSE on the intraday basis making the stock the biggest loser on the Nifty50 at around 10:15 am. The correction was on account of the Offer For Sale (OFS) being undertaken by the government.

The government had announced Offer-For-Sale (OFS) in the oil exploration company on Tuesday after market hours. 

As per ONGC’s filing to exchanges, the government this week will sell up to 1.5 per cent of its stake (0.75 per cent Base + 0.75 Green Shoe Option) in the company to raise about Rs 3,000 crore. The OFS by the government will remain open on March 30 and 31, 2022, the release further stated. 

The floor price for the OFS has been set at Rs 159 per share, which is at a 7 per cent discount to the Rs 171.05 stock closing price of ONGC on the BSE on Tuesday. 

''The promoter (the government) proposes to sell up to 94,352,094 equity shares of the company, (representing 0.75 per cent of the total paid-up equity share capital of the company) on March 30, 2022 (to non-retail investors) and on March 31, 2022 (to retail investors) with an option to additionally sell 94,352,094 equity shares (in case of oversubscription),'' the company said. 

The government owns a 60.41 per cent stake in ONGC which produces half of India's oil and gas.  

In the OFS, a minimum of 25 per cent of the shares are reserved for mutual funds and insurance companies while 10 per cent earmarked for retail investors. 

At around 10:00 am, the stock is trading around 4 per cent lower to Rs 164.45 per share on the BSE, as compared to 0.81 per cent rise in the S&P BSE Sensex during same time. The counter in the last one year has gained almost 58 per cent as compared to around 16 per cent rise in the BSE Sensex.