Oil India IPO – Review

Oil India IPO opened today and was almost fully subscribed within 1 hour. Price band for the Oil India IPO issue has been fixed between Rs 950 and Rs 1,050 per equity share and the issue closes September 10. There are total 2.64 crore equity shares of Rs 10 each are being offered for cash at a price to be decided through a 100 per cent book-building process.

Oil India Ltd IPO issue will constitute 11 per cent of the fully diluted post-issue capital. Also at the same time the Government will sell 10 per cent of its holding in OIL to state refiners – Indian Oil, Bharat Petroleum and Hindustan Petroleum. The issue price will be the rate at which the government stake will be sold to the three firms.

Shall I go for Oil India IPO?

Shall I go for Oil India IPO? That is the question every investor is asking. Oil India’s valuation for the offer price is closer to ONGC. Now this means that the upside form this IPO in the short term will be limited. If you are a long term investor you may subscribe to it.

Oil India (OIL) Profile:

• Category-I Miniratna public sector petroleum exploration and production (E&P) company
• Operating out of India’s North-eastern region
• Daily production of crude oil at 68,358 barrels (10%)
• Daily production of natural gas at 6.2 million cubic meters (7%)

Considering that the two major recent IPOs – Adani Power and NHPC, made disappointing market debuts despite generating heavy oversubscription levels the response to Oil India may be poor. However most of the brokers have recommended buying this IPO.

You have any question or opinion? Write in the comments below to discuss with other readers.

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