ONGC auction gets bids for 1.35 crore shares

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The one-day auction for sale of the government's 5 per cent stake in ONGC gained further momentum by afternoon trade wit total bids for about 1.35 crore shares, but was still far away from the total offer size.

The bids have been mostly in the price range of Rs 290-293 per share for the auction, under which the government has proposed to sell about 42.77 crore shares. The auction commenced at 9.15 am and would close at 3.30 pm on Thursday.

The government has fixed a floor price of Rs 290 per share for the share sale through this one-day auction, wherein it is targetting to raise about Rs 12,000-13,000 crore.

At 3 pm, bids had come in for a total of 1.35 crore shares, accounting for about three per cent of the total offer size.

The early morning bids had come in the price range of Rs 292-294 a piece, but the price fell to Rs 290-292 by afternoon.

In the first hour of auction, bids had come in for about 37,500 shares, while it rose to about 1.7 lakh by the end of second hour of the bidding.

The bidding picked up momentum by the mid-day and bids for more than 10 lakh shares had come in at 1200 hours.

Investment bankers said that the bidding was expected to gain further ground in the last hour.

After an initial spike of about one per cent, ONGC shares had turned weak and even slipped below Rs 290 level by afternoon trade.

The stock was 0.6 per cent down at Rs 291.75 at 3 pm. The stock price has remained above the floor price of Rs 290 in the morning trade and had touched a high of Rs 296.50 within minutes of market opening on Thursday morning.

However, it slipped to as low as Rs 287.65 at around 1.45 pm.

In the event of the total number of orders received at or above the floor price being less than the number of shares being offered for sale, the government would have the right to either conclude the sale to the extent of subscription or cancel the sale.

The shares would be allocated on 'price-priority' basis, meaning the bidders at highest price would be allotted shares.

The government on Tuesday decided to offload five per cent stake in ONGC through the auction route and the planned sale could fetch the government about Rs 12,000-13,000 crore.

The government owns 74.14 per cent stake in ONGC and has proposed to sell 427.77 million shares or 5 per cent equity.

The BSE is the designated exchange for the proposed share sale, but orders can be placed on both the BSE and NSE.

The sale of shares is taking place at a separate window of the two bourses. Any modification or cancellation of the orders would not be allowed in the last 30 minutes.

No single buyer, other than mutual funds and insurance companies, would be allocated more than 25 per cent of the size of the offer.