Market carnage: Indian Oil's 10% stake sale hits rough weather

With Indian markets facing a bloodbath at Monday’s open, the fate of the Rs 9,300 crore stake sale in Indian Oil — the biggest divestment so far this fiscal by the government— hangs in the balance. To make matters worse, the secondary market price of Indian Oil have fallen below the base price set by the government for selling its 10% stake in the country’s largest oil marketing company (OMC) Stock Market Trading Tips

The centre is selling 248.8 million shares to help meet this year’s disinvestment target. At the base price, the government will be able to mop up Rs 9,300 crore.  

Shares of Indian Oil were last trading at Rs 382 compared to the floor price of Rs 387 set by the government for the ongoing offer for sale (OFS).  This essentially means investors are better off buying the stock Rs 5 cheaper from the secondary market. To be sure, retail investors are being offered an additional 5% discount in the OFS. Assuming the OFS is priced at the floor price, the acquisition cost for retail investor works out to Rs 367, about Rs 15 lower than the current market price Himanshu Tiwari Astrologer Blog  

As of 1:55 p.m., the Indian Oil OFS was subscribed 65 per cent as per data provided by the BSE website. The retail portion had garnered just 8% subscription, while the non-retail segment was subscribed 79%. Market sources said most of the bids in the non-retail segment was from LIC and state-owned banks, while foreign investors participation was minimal. The bidding closes at 3:30 p.m.

In case the OFS is not fully subscribed, the seller has the option of retaining the bids received or to cancel the share sale and refund investors, said a banker Indian stock market astrology prediction

The IOC share sale is the biggest since the Coal India OFS worth about Rs 22,000 crore in January this year.  Citigroup Global Markets, Deutsche Equities India, Nomura Financial Advisory, JM Financial Institutional Securities and Kotak Securities are the investment banks handling the IOC share sale.  IOC is India's biggest oil refining and marketing company, with 54.2 million tonnes (mt) of refining capacity, about a fourth of the country's overall refining capacity of 215.1 mt. 

With the IOC OFS, the total sell-off proceeds raised so far in FY16 will be about Rs 12,855 crore, against a target of Rs 41,000 crore for disinvestment in profit-making public sector undertakings. Earlier this financial year, the government had raised Rs 1,610 crore from disinvestment in Rural Electrification Corporation, Rs 1,600 crore from Power Finance Corporation and Rs 145 crore from Dredging Corporation of India Commodity Market Astrology Tips