Oil and Natural Gas Corporation shares surge after govt nod to stake sale

Oil and Natural Gas Corporation (ONGC) saw its shares surge on Wednesday after the government approved a 5 per cent stake sale in the company, due Thursday (March 1).

Shares of the state-owned oil and gas major jumped 5.23 per cent on the Bombay Stock Exchange (BSE) to hit an intra-day high of Rs 298.40 a share before closing the day at Rs 293.35, up 3.46 per cent.

The scrip traded similarly on the National Stock Exchange too, jumping 3.46 per cent to Rs 293.20, having seen an intra-day high of 298.45.

The company said in a regulatory filing to BSE that on Thursday, 427,774,504 equity shares would be on sale, starting at 9.15 a.m. and closing at 3.30 p.m. on the same day (Thursday) with a floor price of Rs 290 per share.

Post-auction, the government's share in the company will come down to 69.14 per cent.

An empowered group of ministers (eGoM) led by Finance Minister Pranab Mukherjee had on Tuesday approved the stake sale of the energy explorer after a gap of nearly nine months when it offloaded five per cent stake in Power Finance Corp garnering Rs 1,145 crore.

The ONGC stake sale is expected to fetch the government over Rs 12,000 crore, helping it bridge the disinvestment target gap. It had hoped to raise Rs 40,000 crore this financial year through sale of its stakes in listed state-run companies.

But tough market conditions and a policy paralysis resulted in many of the key proposals not going through.

The National Stock Exchange said it would be holding a mock trading session on Wednesday to gear up for the ONGC auction.