New Delhi: The Government today (Mar 3, 2004) fixed a price band of Rs 680 to Rs 750 per share for divesting 10 per cent equity in Oil and Natural Gas Corporation (ONGC) through a mega public offer of 14.26 crore (142.6 million) shares.

It has also decided to offer a discount of five per cent to retail investors, an official statement said in New Delhi.

As much as 10 per of the offer would be reserved for shareholders of ONGC and Mangalore Refineries and Petrochemicals Ltd (MRPL), excluding Government, Indian Oil Corporation (IOC) and Gas Authority of India Ltd (GAIL), and another 10 per cent for employees and whole time directors of ONGC.

The remaining 11.40 crore (114 million) shares would be offered to qualified institutional buyers, non-institutional investors and retail investors. The ONGC offer is slated to open on March 5.

ONGC is the largest of the six issues floated by the Government for selling its equity during the current fiscal.

The issue is expected to rake in close to Rs 10,000 crore (Rs 100 billion).

DSP Merill Lynch, Uday Kotak and J M Morgan Stanley have been appointed as book running lead managers to the issue.

Post issue, the Government's equity, which currently stands at 84 per cent would stand diluted to 74 per cent.

Earlier this week, the Government had obtained permission from the Securities and Exchange Board of India (SEBI), permitting the lead managers to issue participatory notes. The move is expected to help attract foreign investors.

Prior to this, the Government had invited bids for sale of equity in five other companies including CMC, IPCL, GAIL and Dredging Corporation.

While IPCL, CMC and IBP issues have been successfully closed, Dredging and GAIL issues are slated to close this week.

The Government hopes to raise Rs 14,500 crore (Rs 145 billion) from the sale of equity in six companies during the current fiscal.