BizNomic

Oil India Limited (OIL) lists at Rs. 1,096 on NSE (National Stock Exchange of India Ltd.) on September 30, 2009. By noon, the share touched a high of Rs. 1149.95 and was trading at Rs. 1,141.15 at 12:11pm IST (Indian Standard Time).

OIL is the second largest national oil and gas company after Oil and Natural Gas Corporation Limited (ONGC) in India as measured by total proved plus probable oil and natural gas reserves and production (Source: DGH).. The company is primarily engaged in the exploration, development, production and transportation of crude oil and natural gas onshore in India and also process produced natural gas to extract LPG. The company is present beyond the national borders through the exploration of crude oil and natural gas in Egypt, Gabon, Iran, Nigeria, Timor Leste and Yemen.

The company’s issue opened on September 7, 2009 and closed on September 10, 2009 with a price band of Rs. 950 to Rs. 1,050. The issue constituted 11% of the fully diluted post Issue paid-up capital and 26,449,982 equity shares for cash.

This Issue was graded at 4/5 by CRISIL Limited. The issue received a tremendous response from investors despite a recent let down by a state-owned hydroelectricity producer NHPC. The issue was subscribed close to 31 times and the Qualified Institutional Buyer (QIB) portion was more than 50 times over-subscribed. The issue price was fixed at the high end of the band at Rs. 1,050. Citigroup Global Markets India, JM Financial, Morgan Stanley India, and HSBC Securities and Capital Markets were joint underwriters to the issue.

OIL has been accorded “Mini Ratna Category I” status since 1997 by the Government of India for operational efficiency and financial strength. The issue was in works for quite a few years. It was delayed due to market uncertainty in the recent crisis. The public offering has arrived at a good time for the company; many financials of the company are at all-time best. The company’s Net Worth and Profits have soared from Rs. 47 Billion and Rs 11 Billion in 2004-05 to Rs. 93.31 Billion and Rs. 22Billion in 2008-09, respectively. All time low Debt-equity ratio at 0.006 in 2008-09. The company declared an interim dividend of 150% for the financial year 2008-2009 and had last year paid a total dividend of 275% for the year 2007-08

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