ONGC withdraws FPO documents...May file RHP again

State-run oil and gas explorer ONGC has withdrawn its FPO documents filed with market regulator SEBI apparently on the back of weak market conditions, dealing another blow to the Government's disinvestment programme. Last week, an oil ministry official reportedly said that the ONGC FPO may not take place in the year ending March 31. ONGC will file the red herring prospectus (RHP) again if instructed by the Government, Chairman and Managing Director Sudhir Vasudeva said today. "The withdrawal of RHP is technical. The document filed in September had a validity of 90 days and so we have withdrawn it. It is no reflection if the follow-on offer (FPO) is coming or not," he told reporters in New Delhi. "If and when required, we will file it again," Vasudeva said, adding that the timing will have to be decided by the Department of Disinvestment. ONGC had filed the RHP in September for the FPO whereby the Government had planned to sell a 5% stake, or 427.77 million shares, in the company.



The FPO was to open on September 20, but was put off due to volatile market conditions. After the FPO, the Government’s stake in ONGC was to come down to 69.14% from the current 74.14%. The Government has so far raised a measly Rs. 11.4bn from disinvestment in state-run companies compared with Finance Minister Pranab Mukherjee’s target of Rs. 400 bn for the financial year. The ONGC FPO has been deferred several times this year. The company does not meet market regulator SEBI’s listing norm whereby half of its Board should be made up of independent directors. Three of ONGC’s directors - S Balachandran, SS Rajsekar and Santosh Nautiyal - ceased to be directors on the company’s board on November 10 after expiry of their three-year term. Their replacements are yet to be named.