ONGC withdraws papers for FPO, will file again if govt asks

“This (withdrawal of RHP) is technical. The document filed in September had a validity of 90 days and so we have withdrawn it... It is no reflection if the follow-on offer (FPO) is coming or not,” ONGC CMD Sudhir Vasudeva told reporters

New Delhi: State-owned explorer Oil and Natural Gas Corporation (ONGC) has withdrawn the papers it filed for a government share sale, but will file the red herring prospectus (RHP) again if instructed, reports PTI quoting chairman and managing director Sudhir Vasudeva.

“This (withdrawal of RHP) is technical. The document filed in September had a validity of 90 days and so we have withdrawn it... It is no reflection if the follow-on offer (FPO) is coming or not,” he told reporters here.

“If and when required, we will file it again,” he said, adding that the timing will have to be decided by the Department of Disinvestment (DoD).

ONGC had in September filed the RHP for the follow-on public offer (FPO) through which the government plans to sell a 5% stake, or 427.77 million shares, in the company. The FPO was to open on 20th September, but was put off days ahead of its opening due to market uncertainty.

“We are ready for the share sale as and when it is decided by the DoD,” Mr Vasudeva said.

After the FPO, the government’s stake in ONGC will come down to 69.14% from the current 74.14%.

The government plans to raise at least a fourth of its Rs40,000 crore divestment target for the current fiscal from the 5% stake sale in ONGC.

The share sale has been deferred several times this year.

It is expected to happen in December, but this is unlikely because the company does not meet market regulator Securities and Exchange Board of India’s (SEBI) listing norm for half of its board to be made up of independent directors.

Three of ONGC’s directors—S Balachandran, SS Rajsekar and Santosh Nautiyal—ceased to be directors on the company’s board on 10th November after expiry of their three-year term.

Their replacements are yet to be named as the proposal is awaiting a nod from the Cabinet Committee on Appointments (ACC).

“I believe the selection process for the three independent directors has started and is in final stages,” Mr Vasudeva said, adding that the timing of the FPO will be taken by the Department of Disinvestment.

Oil secretary GC Chaturvedi said his ministry has agreed to the DoD’s proposal for sale of a 10% stake in Oil India, the nation’s second-largest state explorer after ONGC.

“We have agreed for an FPO of OIL after the share sale in ONGC is completed,” he said.

The government owns 78.4% of OIL.

“They (DoD) asked us about the FPO in OIL and we said we agree to it,” he said, adding that the timing would be decided by the DoD.


India to launch shale gas exploration bid in 12th Plan

As per the available data, six basins—Cambay (in Gujarat), Assam-Arakan (in the North-East), Gondawana (in central India), KG onshore (in Andhra Pradesh), Cauvery onshore and Indo Gangetic basins—hold shale gas potential, DGH director general SK Srivastava said

New Delhi: Joining the global race to tap unconventional hydrocarbon sources to meet energy needs, India will launch its maiden bid round for exploration of shale gas during the 12th Plan Period (2012-17), reports PTI.

“The Government of India is planning first round of shale gas during 12th Plan Period (2012-17) after assessment of resources is completed,” Directorate General of Hydrocarbon (DGH) director general SK Srivastava said at the Shale Gas India 2011 conference here.

Shale gas or natural gas trapped in sedimentary rocks (shale formations) below the earth’s surface is the new focus area in the US, Canada and China as an alternative to conventional oil and gas for meeting growing energy needs.

As per the available data, six basins—Cambay (in Gujarat), Assam-Arakan (in the North-East), Gondawana (in central India), KG onshore (in Andhra Pradesh), Cauvery onshore and Indo Gangetic basins—hold shale gas potential, Mr Srivastava said.

DGH has initiated steps to identify prospective areas for offering, he added.

“Legislative changes will be required for shale gas exploration,” Mr Srivastava said, adding that simultaneous exploitation of different sources like shale gas and coal bed methane is required.

Currently, the policy allows exploration and production of conventional oil and gas and coal bed methane (CBM).

However, shale gas exploration faces several challenges such as the availability of water and vast tracts of land.

He said 3-4 gallons of water is required per well for hydraulic fracturing (pumping liquids down a well into subsurface under pressures that are high enough to fracture rocks to enable movement of hydrocarbons to the well bore).

Also, shale gas production requires drilling of large number of wells where land availability is an issue, he said, adding that disposal of water is also a challenge.

Oil secretary GC Chaturvedi said India’s gas demand is likely to rise from 290 million metric standard cubic meters per day (mmscmd) in 2012-13 to 470 mmscmd in 2016-17. Against this, domestic supply will increase from 124 mmscmd to 220-230 mmscmd only.

The rest of the demand has to be met by either imports or through unconventional energy sources like shale gas, he said.

“Water availability and disposal will be a huge problem in shale gas exploration,” he said, adding that India has signed a MoU with the US for assessment of shale gas resource and developing policy framework to exploitation of the resource.

Oil and Natural Gas Corporation (ONGC) chairman and managing director Sudhir Vasudeva said emissions from the use of shale gas are higher than natural gas or coal and so the environment impact too would need to be assessed.


Direction still down: Tuesday Closing Report

Any rally will be met by further selling

Snapping its eight-day losing streak, the market closed in the green. However, the gains were capped in the post-noon session on selling in select sectors.  Today, the Nifty settled 34 points (0.71%) higher at 4,812 and the Sensex gained 119 points (0.75%) to close at 16,065. Yesterday we had mentioned that a small bounce back would be possible, however, further selling cannot be ruled out. The National Stock Exchange witnessed volume of 60.46 crore shares being traded today.

The market opened higher this morning as investors resorted to bottom fishing, picking stocks at lower prices after the eight-day decline in the market. The Nifty opened 17 points higher at 4,795 and the Sensex added 50 points to 50 points to its previous close to resume trade at 15,996. Capital goods, metal, IT, power, healthcare and oil & gas sectors reported buying interest in early trade, giving the market a much-needed support.

Amid a fair degree of choppiness, the sellers moved in to bring the market to the day’s low in the first half hour itself. At the lows, the Nifty stood at 4,783 and the Sensex fell to 15,970. The lows gave rise to another buying spree taking the benchmarks higher.

The market hit the day’s high at around 1.30pm as the key European indices recouped from their early losses and were trading in the green. At the highs, the Nifty rose to 4,854 and the Sensex breached the 16,000-level to touch 16,213.

However, the market pared part of its gains in the last hour but ended in the green today. The Nifty settled 34 point higher at 4,812 and the Sensex closed the session at 16,065, up 119 points.

The advance-decline ratio on the National Stock Exchange (NSE) was 833:900.

The broader indices underperformed the Sensex today. The BSE Mid-cap index rose 0.34% and the BSE Small-cap index added 0.03%.

BSE IT (up 1.95%); BSE Metal (up 1.54%); BSE Auto (up 1.08%); BSE TECk (up 1.06%) and BSE Healthcare (up 0.98%) were the top sectoral gainers. The sectoral losers were BSE Consumer Durables (down 3.16%); BSE Fast Moving Consumer Goods (down 1.36%) and BSE Power (down 0.27%).

The top performers on the Sensex were Tata Motors (up 6.91%); Jaiprakash Associates (up 4.28%); Tata Steel (up 2.77%); DLF (up 2.58%) and Infosys (up 2.33%). Bharti Airtel (down 2.48%); Tata Power (down 2.29%); ITC (down 1.61%); Bajaj Auto (down 1.42%) and Hindustan Unilever (down 1.33%) settled at the bottom of the index.

The major gainers on the Nifty were Tata Motors (up 7.40%); JP Associates (up 4.77%); BPCL (up 3.70%); Tata Steel (up 3.50%) and Cairn India (up 3.28%). The key losers were Siemens (down 2.80%); Bharti Airtel (down 2.39%); Kotak Bank (down 2.09%); Tata Power (down 2.08%) and ITC (down 1.91%).

Markets in Asia closed mostly in the green after closing sharply lower in the previous session. However, failure of a “super committee” of US policymakers to reach a consensus for the country’s deficit reduction plan and the worsening debt situation in Europe continued to keep investors wary.

The Hang Seng added 0.14%; the Jakarta Composite surged 1.51%; the KLSE Composite gained 0.27%; the Straits Times climbed 0.71% and the Seoul Composite rose 0.34%. On the other hand, the Shanghai Composite fell 0.10%; the Nikkei 225 declined 0.40% and the Taiwan Weighted lost 0.61%.

Back home, foreign institutional investors were net sellers of equities totalling Rs743.02 crore. On the other hand, domestic institutional investors were net buyers of stocks aggregating Rs595.55 crore.

Jai Balaji Industries has informed the exchanges about company’s first monetary receipt of about Rs3.30 crore on account of sale of 54,615 units of carbon credits. The credits received on account of power generated from its waste heat recovery boilers. The stock declined 1.52% to Rs65 apiece on the NSE.

Pipavav Defence and Offshore Engineering Company will raise around Rs900 crore by issuing 8.19 crore shares on a preferential basis to a foreign strategic investor at Rs110 a piece, the company said in a filing to the Exchanges. The investment will be a long term strategic investment in the company, the company added. The stock gained 1.86% to close at Rs57.40 on the NSE.

GTN Industries, an integrated yarns, fabrics and apparels group, is planning to pump in over Rs20 crore in its mercerised cotton garment facilities this fiscal to expand base. The company, which has overall investment of Rs350 crore in the mercerised cotton garment facilities, is expecting its overall group turnover to touch Rs700 crore in FY11-12 as against Rs675 crore last year. The stock gained 1.96% to close at Rs10.40 on the NSE.




5 years ago

Agree the technical direction is still down , but it may be good opportunity to buy some scrips in which the fall is irrational.
Do explore powerful screeners at to identify few of them.

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