| Spreading the net
Mumbai, Feb. 29: The three lead managers to the mega public issue by Oil and Natural Gas Corporation (ONGC) have pulled out all stops to ensure a sizeable subscription.
ONGC is aiming to raise more than Rs 9,000 crore (over $2 billion) for the government by selling 10 per cent of its equity.
The company’s roadshows will see the top brass cover a lot of ground by March 5 when the issue opens.
The lead managers to the issue are J M Morgan Stanley, Kotak Mahindra Capital Company and DSP Merrill Lynch.
Around 22 cities in the country and bulge-bracket investors in 12 centres across Europe, Asia and the US will be addressed, said a Kotak Mahindra Capital official.
“We are looking at ONGC differently from others because of the size of the issue,” said an official affiliated to a lead manager.
Nimesh Kampani of J M Morgan Stanley said, “ONGC is the energy security of the country. Investors cannot ignore it.”
“A large number of retail investors are going to test this issue,” he added.
So far, retail investors have largely kept away from the government stake sale offers in five other companies.
The roadshows will be arranged in Paris and some cities in Germany before moving on to Toronto in Canada followed by Boston, New York and Los Angeles. They will also be held in Singapore and Hong Kong.
Most of the domestic roadshows for IBP and Gail were concentrated in six cities — Ahmedabad, Chennai, Mumbai, Bangalore, Calcutta and Delhi. Merchant bankers to these issues said the coverage was good as almost 75 per cent of the bidders originate from these centres. Some of the roadshows were also held in Singapore and Hong Kong, they added.
The issue application forms were printed from four centres to ensure faster distribution and lower freight costs. More than one crore forms have been printed at these centres.
Unlike IBP, roadshows for ONGC will be completed by the time the issue opens.
The biggest domestic public issue till date was the one by Reliance Petroleum, garnering close to Rs 7,000 crore.
While the government is anxiously monitoring the response to its offers on a daily basis, China has already raised around $5 billion in the last two months of 2003 from equity sale on global stock exchanges.
China Life Insurance Co saw orders from big institutions topping $50 billion as investors stampeded for its shares.
On the block is China Construction Bank, aiming to raise up to $8 billion from a simultaneous listing on China, Hong Kong and New York stock exchanges.
Analysts wonder whether the BJP-led central government and its merchant bankers have missed the big picture by not looking at an overseas listing.
“Don’t underestimate the Indian capital market”, said a senior official affiliated to a lead manager. “Foreign investors are equally at home buying shares listed on Indian bourses.”