Date:01/01/2004 URL: http://www.thehindubusinessline.com/2004/01/01/stories/2004010102090500.htm

Back Kotak, DSP, Morgan get mandate for ONGC float

P. Manoj

New Delhi , Dec 31

BARELY a week after the Cabinet Committee on Disinvestment (CCD) cleared the sale of 10 per cent equity in ONGC and Gail (India) Ltd, the Disinvestment Ministry has appointed Kotak Mahindra Capital Co, DSP Merrill Lynch and JM Morgan Stanley as book runners for the public float in ONGC, while the mandate for the Gail offering has been awarded to HSBC and ICICI Securities.

The ONGC mandate was awarded for a transaction fee of 0.075 per cent of the amount realised from the mega public issue involving sale of 14.26 crore shares. Whereas, the book runners for the GAIL issue involving sale of 8.46 crore shares would get 0.145-0.150 per cent, Disinvestment Ministry sources said.

Kotak Mahindra emerged the lowest bidder by quoting a transaction fee of 0.075 per cent of the proceeds from the public issue of ONGC. DSP Merrill Lynch and Morgan Stanley, which had quoted a transaction fee a notch above Kotak, were also included in the consortium at Kotak's transaction fee, to manage the issue that will be done through the book building route.

Following the 10 per cent domestic offering, the Government's residual stake in ONGC will be reduced to 74.11 per cent while that in GAIL will fall to 57.35 per cent.

The public offers in ONGC and GAIL are expected to fetch about Rs 12,500 crore, helping the Government meet the disinvestment target of Rs 13,200 crore for 2003-04.