IOC plans FPO at Rs 450 per share in Jan’11

Indian Oil Corp (IOC) is looking at a price of Rs 450 per share for its follow- on public offering ( FPO), which is expected to hit the market in January next year, company chairman B. M. Bansal said on Wednesday.

Bansal said, “ We expect the pricing to be around Rs 450 per share.” This is higher than IOC’s current stock price. Reacting to Bansal’s comment IOC share shot up by 14.32 per cent to Rs 395.75 before settling at Rs 383.10 on Wednesday.

He said the FPO, in which the government will divest its 10 per cent share and IOC sell an equal number of fresh shares, was likely in the third or fourth week of January.

IOC has hired six banks — Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS — to handle the public offer.

Bansal said the FPO will raise about Rs 20,000 crore and the government and IOC will get Rs 10,000 crore each.

The company plans to infuse the funds into its grassroots petrochemical project at Paradip in Orissa and liquefied natural gas terminal at Ennore in Tamil Nadu.

The Centre plans to sell shares in IOC and ONGC to raise Rs 40,000 crore to fund infrastructure projects and cut its fiscal deficit.