GAIL public issue deferred by a month

The divestment ministry has decided to defer by a month the public issue for divestment of 10 per cent government equity in GAIL and it would now take place  after the public placement of equity in Oil and Natural Gas Corporation in March.

The decision was taken at a meeting of the top ministry officials with the merchant bankers and legal advisors this evening, sources associated with the divestment process said.

Sources said the market regulator had given all the clearances for the public issue for both the oil PSUs even though these do not fall under the purview of existing guidelines.

SEBI is understood to have communicated to the Divestment Ministry that it would facilitate the sale of equity and has given a go ahead.

The government had sought certain exemptions from the market regulator, presumably relaxation on timing to announce the price band, and the Divestment Secretary Dhirendra Singh had gone to Mumbai last week, understandably to meet SEBI officials in connection with the issues.

The schedule for sale of equity in ONGC and GAIL would now be sent to the Group of Ministers, created for the purpose by the Cabinet Committee on Divestment, for the final verdict.

Sources said that offerings would be made in February for residual equity in IPCL and CMC, two PSUs that were privatised recently.

This would be followed for public offerings in IBP, sources said, adding that Divestment in state owned Dredging Corporation would also take effect simultaneously.

After the sale of residual equity in the three privatised companies and state owned Dredging Corporation, the issue for ONGC and GAIL would hit the market, they added.

The draft prospectus for public offering in IBP, IPCL, CMC and Dredging Corporation, besides the draft red herring document for ONGC and GAIL, were filed with market regulator SEBI last week.

The government had fixed a divestment target of Rs 13,200 crore (Rs 132 billion) in the current fiscal although till November 2003, it had only mobilised about Rs 1,300 crore (Rs 13 billion).

The slew of public offerings slated for February and March are expected to go a long way in bridging this gap.