Share-split, bonus issue approval lifts ONGC by 5 pc on BSE

MUMBAI: Oil & Natural Gas Corporation ( ONGC) jumped over five per cent in the opening trade on BSE today, buoyed by the government's approval to the share split and issue of bonus shares by the company.

Yesterday, the government approved a share split in ONGC and issue of bonus shares as a prelude to the company's follow-on public offer in March 2011.

Bolstered by the move, share of the state-run oil and gas major had a good start and surged by 5.07 per cent to an early high of Rs 1,353.85 on the Bombay Stock Exchange.

Similarly, the scrip witnessed a gain of 5.31 per cent to trade at Rs 1,354.65 on the National Stock Exchange.

Significant gains in the heavy-weight ONGC was instrumental in pushing up the 30-share benchmark Sensex by 217 points to 20,067 level.

According to sources, the Cabinet Committee on Economic Affairs ( CCEA) approved splitting a share of ONGC with a face value of Rs 10 into two shares of Rs 5 each. Besides, it is believed to have approved a 1:1 bonus issue (1 share for every share held).

ONGC had suggested to the government that the company's stock be split ahead of the FPO -- through which the government plans to sell 5 per cent of its shares and expects to mop up Rs 10,800 crore.