While the company’s board has cleared the proposed Rs11,500 crore share sale, the RHP will be filed with SEBI aster getting a nod from the Department of Disinvestment
New Delhi: The board of Oil and Natural Gas Corp (ONGC) has approved the red herring prospectus (RHP) for a proposed Rs11,500 crore share sale, but is still awaiting the Department of Disinvestment’s (DoD) nod for filing papers with the Securities and Exchange Board of India (SEBI), reports PTI.
The full board of ONGC, including three newly appointed independent directors, yesterday approved the RHP, an official said here today.
“We are ready. Whenever the DoD tells us, we will file the prospectus with SEBI,” he said. “The FPO will hit the market in three weeks from the filing of RHP.”
The government is selling 5%, or 427.77 million shares, through a follow-on public offer (FPO) and ONGC is assisting in the sale. “The call on when the FPO has to be launched will have to be taken by the government,” he said.
The official said the government earlier this month appointed three independent directors, including former RBI deputy governor Usha Thorat, on the board of ONGC, paving the way for the sale of shares in the state-owned firm.
The other independent directors appointed to the ONGC board include Prof Deepak Nayyar (ex-vice chancellor of the Delhi University) and former finance secretary Arun Ramanathan.
The appointment meant that ONGC now conforms to market regulator SEBI’s listing requirement of having an equal number of executive and non-executive directors.
The share sale was originally planned to happen in 2010-11, but was deferred to 5th April as the company did not have adequate number of independent directors on its board.
The FPO was then planned to be launched on 5th July, but was deferred due to the same reason.
ONGC has six functional directors, besides the chairman.
It also has two government-appointed nominee directors, taking the total strength of functional/promoter directors to nine.
In comparison, it has five independent directors and needs four more to meet SEBI’s listing norm.
But since the company does not have a full-time chairman and director (human resources), the appointment of three directors would help ONGC meet SEBI’s norm, the official said.
Post-FPO, the government’s stake in ONGC would come down to 69.14% from the existing 74.14%.
ONGC in February had received the report of independent auditors, who certified the company’s oil and gas reserves, a mandatory requirement for explorers making public offers.
Bank of America Corp, Nomura Holdings, HSBC Holdings Plc, JM Financial Services, Citigroup Inc and Morgan Stanley are managing the FPO.
The order was passed on a Special Leave Petition by Tata Motors to stay distribution of land till the Calcutta High Court has disposed of the main matters
New Delhi: The Supreme Court today provided interim protection to the rights of Tata Motors till disposal of the main matters pending before the Calcutta High Court on the land earmarked for the Tata Motors' integrated project at Singur.
The order was passed on a Special Leave Petition (SLP) by Tata Motors to stay distribution of land till the Calcutta High Court has disposed of the main matters. Tata Motors appealed to the Supreme Court that the position on the ground should not be irretrievably changed when the main matters are pending before the Calcutta High Court.
"As an interim arrangement, we direct the State not to return the land to the unwilling owners until further orders being passed by the High Court," the Supreme Court said "taking note of the apprehensions expressed by the petitioners".
The Supreme Court said, "Considering the fact that the petitioners have approached the High Court challenging the action of the State and in as much as the main issue is pending before the High Court, we are not inclined to interfere at this stage."
The Supreme Court added, "All the parties are directed to co-operate with the High Court for early decision in the main matters. In view of the urgency expressed by all the parties, we request the High Court to dispose of the main matters as early as possible preferably within a period of one month."
Tata Motors had appealed on 24th June to the Advocate General of West Bengal that the government should not proceed with any action on the Singur plot in view of the ongoing hearing on the company's main matters on The Singur Land Rehabilitation & Development Act 2011.
On 27th June, the Advocate General informed the Calcutta High Court that the state government was unable to accept the proposal of Tata Motors.
The Singur Land Rehabilitation & Development Act 2011 charges Tata Motors with non-commissioning of the plant and abandonment, and takes away its rights to the land without providing for a reasonable compensation, despite the company having made an investment of over Rs1,800 crore in the plant. All the equipment had been installed and trial production had begun. In fact, about 15 to 20 cars were ready for roll-out.
On Wednesday, Tata Motors ended 1.48% up at Rs997.80, while the benchmark Sensex gained 1.09% to 18,693.36.
“In a developing economy like ours, if we cannot bring inflation within a manageable limit, the hardship goes to the weaker sections of the people... they are the worst sufferers,” finance minister Pranab Mukherjee said
Washington: Exuding confidence that the economy will grow by 8.5% in 2011-12, finance minister Pranab Mukherjee on Wednesday said the recent hike in prices of petroleum products will not have much impact on the fiscal deficit, reports PTI.
Asked if he will consider rolling back the increase in prices of cooking gas (LPG), diesel and kerosene amidst demands from various quarters, the minister said, “No...No question of revoking (price hike).”
As regards the impact of the decision to cut duties on the fiscal deficit, he said the shortfall would be made good by buoyancy in tax collection and improved compliance.
“I do not think so because this was the conscious decision... About Rs49,000 crore will be the shortfall in the duty. I think it would be possible for us to make it up through buoyancy and by better compliance,” Mr Mukherjee told PTI in an interview.
The government proposes to reduce fiscal deficit to 4.6% of the gross domestic product (GDP) in 2011-12 from 4.7% a year ago.
In view of spiralling prices of crude oil in the international market, the government had increased the price of diesel by Rs3 per litre, LPG by Rs50 per cylinder and kerosene by Rs2 per litre. The price hike decision was accompanied by a reduction in excise and customs duties, resulting in a per annum revenue loss of Rs49,000 crore.
The economy, the minister hoped, would grow by around 8.5% during the current fiscal, the same rate which was recorded during 2010-11.
“I am still holding the projection which I had that is 8.5% plus... We shall have to wait for some time. But it would not be less than 8% plus,” he said.
The economy will grow by over 8% despite the conscious decision of the Reserve Bank of India (RBI) to sacrifice growth to contain inflation, Mr Mukherjee said, adding that the government and the central bank have been trying to strike a balance between containing growth and promoting inflation.
“One need not cancel the other, but controlling inflation is essential. In a developing economy like ours, if we cannot bring inflation within a manageable limit, the hardship goes to the weaker sections of the people... they are the worst sufferers,” the minister said.
Mr Mukherjee was here to participate in the ‘US-India Economic and Financial Partnership’ jointly organised by the Confederation of Indian Industry (CII) and Brookings Institute, a Washington-based think-tank.
Sacrificing growth, the RBI has raised key policy rates ten times since March 2010 to contain inflation, which is hovering at around 9%. Inflation stood at 9.06% in May.
Controlled inflation is needed, Mr Mukherjee said, adding that the “best course would be to reduce inflation to have it at the acceptable moderate level and also to have reasonable high growth rate... because if you want to have high growth which is not realistic, that would lead to inflationary pressure.”
On the other hand, he said the country cannot afford to have very low growth, as it would mean less jobs and no wealth creation. “So we shall have to strike a balance and exactly we are doing that,” the minister said.
The RBI, which is slated to hold its next review of the monetary policy on 26th July, has pegged India’s GDP growth in 2011-12 at 8%, lower than the 8.5% rate recorded in the previous fiscal.