New Delhi: India's largest oil and gas explorer Oil and Natural Gas Corp Ltd's (ONGC) proposed Rs 120 billion follow on public offer (FPO) will be launched after the appointment of independent directors on the company's board, the Press Trust of India reported, citing a Finance Ministry official.
"We will file draft papers again once the requisite number of independent directors are appointed on ONGC board," the official told the agency.
As per the market regulator Securities and Exchange Board of India (SEBI) norms, half of the company's board should consist of independent directors.
Earlier, in November, ONGC withdrew the Red Herring Prospectus (RHP) for the proposed FPO for sale of shares due to expiry of the 90-day validity period. The company had filed the draft prospectus in September.
The company's proposed FPO, which was initially slated to hit the market in March, has been postponed several times this year due to poor market conditions, delay in appointment of independent directors and lingering concerns over government policy on fuel subsidies, a part of which is borne by ONGC.
The Department of Disinvestment (DoD) is awaiting a nod from the Appointments Committee of the Cabinet (ACC) to name new independent directors on the company's board, according to the official.
The government is looking to sell 5% of its equity stake in ONGC through the FPO. Post the public offer, the government's stake in the the firm will likely fall to 69.14% from the present 74.14%.
The stake sale is part of the government's disinvestment plan to raise Rs 400 billion in the current fiscal 2011-12 by selling equity shares in profitable public sector companies.
ONGC's shares were trading at Rs 267.80, down 0.09%, at 1:23 p.m. on the Bombay Stock Exchange today.