ONGC 'sale debacle' falls short

Sold!: or not sold at ONGC auction

By Steve Marshall and news reports

 02 March 2012 08:41 GMT

India’s Oil & Natural Gas Corporation has been criticised for overpricing its stock after failing to sell all of the shares offered in a $2.5 billion sale of a 5% stake in the state-owned company, casting doubt over divestments at other public-sector entities.

ONGC shares fell more than 2% on Friday after the auction debacle that resulted in 98.3% of the shares being taken up after the offer price was set at 290 rupees per share – a 2.3% premium to the closing price on 28 February.

The shortfall deals a blow to the New Delhi government’s efforts to raise cash through sales of stakes in state enterprises to curb a yawning fiscal deficit, as well as revive stock sales, and is likely to lead to a rethink on the pricing of future divestments.

The ONGC…

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