With less than a week to go for the expected commencement of the follow-on public offer by Oil and Natural Gas Corporation Ltd (ONGC), the company jolted the markets with an announcement that it was deferring the launch.
While it did not give any reason for its decision to put the brakes on the issue and said it would "evaluate its decision in due course", the market was rife with rumours that there was some difference of opinion over the pricing of the issue.
ONGC on Friday told the exchanges that according to the Offer Programme mentioned in the Red Herring Prospectus, the issue was to open on September 20, the QIB Offer Closing Date was September 22 and for all other bidders, the closing date was September 23. Now, the "selling shareholder has decided not to proceed with the aforementioned offer programme and shall evaluate its decision in relation to the offer in due course," ONGC said.
The stock was up in early morning trade by about Rs 15 to trade around Rs 276. Generally, the PSU FPOs are priced at a discount to the market price. With the price shooting up just before the issue was to open, it has raised eyebrows as to which price would be taken into account if a price discount is to be determined to benefit retail investors.