Oil India IPO is coming in the primary market during the month of March, 2008. The fundamental position of the company is quite strong and is expected to do well even in this volatile IPO and secondary market. This article is going to give you an idea about this IPO, reasons behind its issuance and fundamentals of the company.
Oil India Limited is going to issue IPO securities to the primary market during the last part of 4th quarter of the fiscal 2007-2008. The main motive of the company behind this issuance is its massive expansion plans both inside India and outside it.
Oil India IPO – Particulars
Oil India Limited is going to issue its first ever Initial Public Offer during the month of March, 2008. OIL expects the IPO to fetch around Rs 1500 crore for it from the primary market.
At present, the majority stakeholder of this company is the government whose share accounts to 98%. Oil India is going to issue 2.64 crore IPO securities to the investors. After this IPO, the government’s share in the company is going to come down to 87%.
Merchant Bankers of OIL India IPO: –
Morgan Stanley India Company
JM Financial Consultants
HSBC Securities and Capital Markets
Citigroup Global Markets
Reason Behind floating Oil India IPO
The company for its major expansions in the coming 5-years would use proceeds from this IPO. Oil India plans to expand its base outside India by acquiring oil producing and exploring companies of small and medium size. OIL along with its partner, Indian Oil Limited, is planning to acquire oil-producing plants in Asia, Africa and South America.
Their investment planning also includes: –
Investment in the field of exploration as well as production of oil and gas to the tune of Rs 15,000 crore
Investment of Rs 2000 crore in the downstream projects like refining
Oil India Limited is also discussing with HPCL (Hindustan Petroleum Corporation Ltd.) for participating in their refineries in Vishakhapattanam and Bhatinda.
Oil India Limited – Fundamentals
Oil India Limited – Facts
CRISIL-India Today adjudged OIL to be among the best 3 PSUs in India within the energy sector.
Oil India Limited’s paid up capital and net worth amounts to Rs 214 crore and Rs 6849 crore respectively.
International E&P assets are spread over India, Iran, Yemen, Sudan, Libya, Nigeria and Gabon. OIL’s operators are located in Libya and Gabon.
For the last 4 years, Oil India Limited is rated as an Excellent performer by the government of India.
OIL also bagged the best PSU performer award for the year 2006 given by Government of India’s Department of Public Enterprises.
Oil India Limited – Financials
Turnover of the company rose from Rs 29 billion to Rs 54 billion during 2002-03 and 2006-07
OIL’s profitability increased from Rs 9.17 billion to Rs 16.4 billion within the period 2002-03 and 2006-07
EPS (Earning Per Share) of Oil India Limited was 43 during the fiscal 2002-03 whih rose to 77 during 2006-07.
OIL distributed dividends to the tune of 260% during 2006-07 as compared to 130% in the 2002-03 fiscal.
Current IPO market health and OIL India IPO
In the recent past, highly hyped Reliance Power IPO slid significantly within 2 days of its listing. This made other companies (like Wochardt Hospital, EmaarMGF and SVEC Constructions) shelve their IPOs even in the middle of book building process.
But still Government is confident enough to float IOL’s IPO in this volatile market conditions as per prior planning on the basis of strong fundamental position of the company.
Book keeping process of the Oil India IPO would start in the last month of the current fiscal, 2007-08. Management of the company hasn’t deferred its arrival in the primary market at this time round when Reliance Power IPO has seen a heavy downside within two days after listing. Strong fundamental position of Oil India is its greatest strength.
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Last Updated on : 30th July 2013