ONGC's follow-on offer likely by July end

The board of state-run explorer and producer Oil & Natural Gas Corp has approved the red herring draft prospectus for its follow-on public offer (FPO), and it now only awaits a go-ahead from the government.

The oil major will file the necessary papers with the Securities & Exchange Board of India after the government approves the FPO plan. ONGC chairman S K Hazarika said in an interview to CNBC-TV18 that they are waiting for a call from the department of divestment.

ONGC is targeting to launch the FPO by the fourth week of July.

Hoping to see clarity on subsidy issue before the FPO road shows begin, Hazarika said that a floor above $55 / bbl will be good for the company.

The offer, expected to raise up to $2.8 billion, has been delayed by several months as rising crude oil prices and a consequently higher subsidy burden kept the state-run firm away from the market.

Reports say ONGC shares may be offered in the price band of Rs240-260 in the FPO.