New Delhi: Government tonight (Mar 2, 2004) fixed a price of Rs 620 a share to sell its 26 per cent residual equity in oil major Indo-Burma Petroleum (IBP) to mop up Rs 352 crore and offered a discounted price of Rs 589 a share for retail investors.

With this, the Government has completed the third public offer for sale of residual equity, the others being Indian Petrochemicals Corporation Ltd (IPCL) and CMC, which collectively gave the exchequer about Rs 1,742 crore.

According to sources associated with Disinvestment process, IBP issue was over subscribed 2.8 times and retail investors would get 25 per cent of 57.58 lakh shares at discounted price of Rs 589 per share.

The Government is part-selling its equity in three public sector undertakings (PSUs), including Oil and Natural Gas Corporation (ONGC) and Gas Authority of India (GAIL) as part of efforts to attain the revised divestment target of Rs 14,500 crore during the current financial year.

The ongoing GAIL issue would close on March 5, while ONGC issue would open on March 5, for which floor price would be determined tomorrow.

The final decision was approved by the three Cabinet Ministers - Finance Minister Jaswant Singh, Petroleum Minister Ram Naik and Disinvestment Minister Arun Shourie.

Apart from the 25 per cent equity allotted for retail investors bidding for upto Rs 50,000, an equal quantity was earmarked for high net-worth individuals.

The qualified institutional buyers would be allotted the remaining 50 per cent equity, sources said.

The public offer constitutes Government's 26 per cent residual stake in IBP after it sold 33 per cent stake to public sector Indian Oil Corporation (IOC) in 2002.

Floor price for the issue was fixed at Rs 620 per share on a face value of Rs 10 per share.

ICICI Securities and Kotak Mahindra Capital acted as book running lead managers to the issue.

Subscriptions for the issue remained under the dismal three per cent mark during the first three days of the offer starting February 23 and picked up following some tough talk by Disinvestment Minister Arun Shourie to merchant bankers.

Bids for the issue shot upto 60 per cent on the fourth day of the offer after Government said it had identified persons who were responsible for market manipulation.

Public offers for two other PSUs Dredging Corporation and GAIL are to close over the next two to three days while ONGC offer would open on March 5.

Government would decide on the floor price for ONGC public float on March 3. The ONGC public offer where government is offloading 14.2 crore shares representing ten per cent equity is slated to open on March 5.