Cabinet to approve split in ONGC stock

The government is likely to approve a split in Oil and Natural Gas Corp (ONGC) stock and issue of bonus shares at the meeting of the Cabinet Committee on Economic Affairs (CCEA) Wednesday evening.

ONGC shares of Rs 10 each will be split into two shares of Rs 5 each, sources in the know of the development said.

Besides, 1:1 bonus issue (one share for every share held) will also be considered as a prelude to the company's follow-on public (FPO) slated in March 2011.

"Wait for some time, you will get to hear something (by evening)," ONGC chairman and managing director R S Sharma told reporters here.

State-owned ONGC had suggested to the government that the company's stock be split ahead of a planned follow-on public offering in March. The government, which plans to sell 5 per cent of its shares through FPO, expects to mop-up Rs 10,800 crore.

Post offer, the government shareholding in ONGC would come down to 69.14 per cent from the current 74.14 per cent.

ONGC had appointed two international auditors - DeGolyer and MacNaughton and Gaffney, Cline and Associates - to certify its oil and gas reserves. It is getting a certification in the third year because of the planned FPO, as opposed to the normal five years.