COMPANY LAW
| Like ONGC, OIL may also go for stock split Mon, 25 Apr 2011 00:47:00 +0530 |
| Close on the heels of Oil and Natural Gas Corporation (ONGC), the second biggest oil producing public sector unit Oil India Ltd (OIL) may be going for a stock split to expand retail participation in the company. ONGC went for a stock split in preparation for a follow-on issue that is expected to hit the market in the second quarter of 2011-12. “ONGC went for stock split recently. We will also consider it and approach the government for approval at an appropriate time to widen retail investor participation,” said a senior OIL executive. ONGC’s stock split and bonus issue became effective from February 8 this year. In the quarter ended March 31, the number of ONGC shares traded at the Bombay Stock Exchange stood at around 21.70 million, up by a steep 169 per cent compared to the 8.06 million shares traded in the quarter ended December 31, 2010. After split and bonus, ONGC’s share price had fallen from Rs 1,200 to around Rs 286 and increased trading volumes. Over the same period, the number of OIL shares that were traded at the BSE declined nearly 42 per cent to 513,837 shares. As on Thursday, ONGC’s share price stood at Rs 304.20 while OIL’s was Rs 1,328.60. ONGC has given 1:1 bonus to shareholders along with splitting equity share of Rs 10 face value into two. “OIL may look at splitting the Rs 10 face value share into five,” said the official. Experts are of the view that split will help in increasing tradability of OIL shares. “The company can do a split to increase tradability but OIL’s case is different from ONGC where the split was done keeping in view the upcoming follow-on public offer (FPO),” said investment advisor S P Tulsian. MARKET MOVERS For 2009-10 financial year ONGC OIL Revenues (Rs crore) 61,982 8,072.80 Net profit (Rs crore) 16,767.55 2,610.52 Operating profit margin (%) 64.07 57.76 Earnings per share (in Rs ) 78.39 113.78 Crude oil production (million tonnes) 24.67 3.611 Gas production (billion cubic metres) 25.60 2.415 The government, promoter of ONGC, is selling its five per cent stake or 427.77 million equity shares in the FPO that on the last closing price could help the government raise about Rs 13,012 crore. Following the offer that is expected to happen sometime during June-July, the government’s stake in ONGC would come down to 69.14 per cent from 74.14 per cent at present. |
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