Oil & Natural Gas Corp, India's biggest oil producer, received orders for more than six times the amount of stock offered in a government share sale that may raise as much as US$2.4 billion.
Investors ordered 860.1 million shares, against the 142.6 million available, the Mumbai stock exchange's Web site showed.
The final price will be announced today.
The sale of a 10 percent stake in Oil & Natural Gas, the nation's biggest stock offer, gives investors a chance to buy into a company that supplies a third of the 105 million tonnes of oil a year used by India's billion people. Overseas investors accounted for about 90 percent of the bids received on the National Stock Exchange.
"The fact that India's oil and energy sector is globally signifi-cant, has certainly registered with overseas investors," said Vijayan Krishnamurthy, chief executive offer at JM Mutual Fund, which has the equivalent of US$1 billion in assets and owns 28,000 Oil & Natural Gas shares.
"ONGC is flickering brightly on their radar screens. That wasn't the case even a year ago," he said.
The sale marks the final stage of a month-long disposal of government stakes in six companies that will raise US$3.2 billion by the March 31 fiscal year-end.
India received bids in excess of the shares it's selling in companies including gas distributor GAIL (India) Ltd and Dredging Corp of India.
The sales will help narrow the government's budget deficit a month before elections and may pave the way for further asset sales. India needs money to help fund spending on roads, schools and other projects as the nation's economy expands at its fastest rate in 15 years.
The government is tapping demand that drove the benchmark Sensex share index up 73 percent last year as international investors poured a record US$7.6 billion into Indian stocks.
"The timing has been good. The government sold good assets at a time when the markets are doing well," said Rajiv Jain, managing director at New York-based Vontobel Asset Management Inc, which has US$100 million in Indian stocks and owns 356,000 Oil & Natural Gas shares.
"I'm not the least bit surprised that the sale was successful," he said.
JM Morgan Stanley, DSP Merrill Lynch and Kotak Mahindra Capital Co managed the sale.
Overseas investors accounted for 649.2 million of the 719.58 million shares bid for on the National Stock Exchange on Friday, the latest day for which information on investor categories was available.
Indian mutual funds bid for 28.12 million, insurance companies ordered 5.91 million and financial institutions bid for 13.77 million. Individual investors ordered 10 million shares out of the 35.6 million set aside for them.
Though the company's shares have tripled in the past two years, many investors avoided the stock because of its limited availability.
The government's sale of a 10 percent stake will increase the free float to 14 percent and raise Oil & Natural Gas's profile with international investors.
"The stock will be bought by index funds as its weighting in global indices will rise," John Burbank, who manages US$500 million at Passport Capital in San Francisco, including 600,000 Oil & Natural Gas shares, said before the sale.
Oil & Natural Gas plans to spend US$2.2 billion a year through 2007 exploring in India -- where it owns rights to explore 51 of the 91 sites the government has sold the past three years -- Africa, Russia, Libya and Vietnam.
Oil & Natural Gas is boosting investment to meet India's rising energy demand, which it expects will grow at more than 4 percent annually for the next 25 years.
Part of that money will come from internal cash resources. The company had cash or cash equivalent of US$2.2 billion as of Dec. 31 and was almost debt-free.
The successful sale of a government stake may prompt the company to sell more shares in future.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
UNWAVERING: Paraguay remains steadfast in its support of Taiwan, but is facing growing pressure at home and abroad to switch recognition to Beijing, Pena said Paraguayan President Santiago Pena has pledged to continue enhancing cooperation with Taiwan, as he and Japanese Prime Minister Fumio Kishida expressed opposition to any unilateral change to the “status quo” in the Taiwan Strait using force, Japanese media reported on Saturday. Kishida yesterday completed a trip to France, Brazil and Paraguay, his first visit to South America since taking office in 2021. After the Japanese leader and Pena spoke for more than an hour on Friday, exchanging views on the situation in East Asia in the face of China’s increasing military pressure on Taiwan, they affirmed that “unilateral attempts to change the