OIL India IPO receives good response from institutions

Issue subscribed 4 times by 16:00 IST on day three

The initial public offer (IPO) of state-run Oil India was subscribed 4 times by 16:00 IST on day three, data on NSE website showed. The IPO received bids for 10.56 crore shares on Wednesday, 9 September 2009, compared to the issue size of 2.64 crore shares. The IPO opened for bidding on Monday, 7 September 2009, and closes on Thursday, 10 September 2009.

The IPO has received strong response from institutional investors. The qualified institutional buyers (QIB) category was subscribed more than 2.5 times on day two on Tuesday, 8 September 2009, with foreign institutional investors putting in bids for 3.68 crore shares.

At a price band of Rs 950-Rs 1050, the PE ratio works out to 10.2-11.3, based on earnings per share (EPS) of Rs 93 for the year ended March 2009 on post-issue equity of Rs 240.45 crore. The company is raising about Rs 2700 crore from the IPO.

Along with the IPO, the government is simultaneously selling a part of its stake in Oil India to the three state-run refiners - Indian Oil Corporation, HPCL and BPCL. Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13% to 78.5%.

Oil India is India's second biggest oil and gas production firm in terms of revenue after ONGC. Oil India's net profit rose 25.1% to Rs 2230.85 crore on 17.6% growth in sales to Rs 7200.70 crore in the year ended March 2009 over the year ended March 2008.