On fast track, FM advances FIPB meeting

NEW DELHI: Showing the superfast speed with which the government is working on the PSU public issues, finance minister Jaswant Singh today got the FIPB meeting preponed by two days to get the ONGC, GAIL, IBP and IPCL floats cleared.
The FIPB meeting, which is usually held on a Friday, was preponed by the finance minister for today and these proposals were added to the agenda to get them cleared.
The PSU floats in the primary market required FIPB permission as shares are being offered to FII/NRIs and other overseas categories. The government is in a rush to complete the floats by March itself so that the receipts can be counted in the current fiscal. Alongwith these floats, the government is also selling its residual stake in divested PSUs like IPCL and IBP.
So fast has been the process that all the four PSUs made formal requests to the government in the last 2-3 days itself and the same has already been approved cutting across all usual procedural hassles.
The government has also told the lead managers that the issue needs to be completed in record time by March end and all the work, including due diligence and finalising of accounts, is being done at a rapid pace.

The government has decided to offload 10% of its shares in the domestic market of ONGC and GAIL both of which are blue chip oil and gas companies.
The float of ONGC is going to be a landmark for more reasons than one. It is going to be the largest ever pure equity mop up by an Indian company whether in the domestic or the international market. The size of the IPO, which will be a humungous $2 billion atleast at current market rates, rates high even on a global scale.
The largest IPO in 2003 was that of China Life which raised $3.4 billion but that was a global issue which raised funds from the New York and Hong Kong markets while ONGC is going to be only a domestic offering.
Kotak Mahindra, DSP Merrill Lynch and JM Morgan Stanley have been appointed lead managers to the ONGC issue while ICICI Securities and HSBC have been authorised to handle GAIL float.
Some of the biggest issues of the past by Indian companies would turn minnows in comparison to the ONGC offering. The previous record for the largest issue by an Indian company is held by Reliance Petroleum which had raised Rs 5,500 crore in 1992. But that was a convertible debenture while ONGC will be an equity offering.