ONGC board clears stock split, bonus share issue

NEW DELHI: State-owned exploration major Oil & Natural Gas Corporation (ONGC) has announced that its board has decided to give a 320% special interim dividend and bonus shares to its shareholders besides splitting shares into two, ahead of its public issue where the government will disinvest its 5% stake to raise about Rs 11,000 crore.

ONGC’s one share with a face value of Rs 10 will become four shares with a face value of Rs 5 each, director-finance DK Saraf said after the board meeting.

The government, which holds around 74.11% stake in the company, will be the largest beneficiary of special interim dividend. It will get Rs 5,074 crore, ONGC chairman & managing director RS Sharma told reporters.

The government will also get Rs 1,163 crore as dividend tax. ONGC will pay a total of Rs 6,844 crore as dividends computed on the record date, December 21, he said.

ET was first to report that the government had approved splitting each share of ONGC into two, making it attractive and affordable for retail investors, ahead of the follow-on public offer (FPO) and asked ONGC to give special dividend. The government had followed a similar strategy in the IPO of stateowned Engineers India earlier this year.

While the price band is yet to be set for the FPO, it is almost certain that retail investors will get ONGC’s share at a 5% discount, officials said. ONGC’s FPO is expected in the first week of March, Mr Sharma said. “But a final decision regarding the FPO date will be taken by the government,” he added.

ONGC chairman said that the company would be ready to meet the government's March 31 deadline.