India puts share sale of ONGC on hold. The government has yet again deferred the FPO of the state-run oil and gas firm’s FPO on the likely grounds of price mismatch.
This fourth postponement of the 5% stake sale in ONGC has sent the PSU stock price soaring by 5% on the bourses, as investors cheer deferment of further equity dilution at least for the time being.
However, on the other hand, the sudden decision to postpone the FPO process shows illogical thinking on part of the government which seems to be banking on price mismatch or higher valuation in current panicky markets.
This will not only lead to opportunity loss to suck valuable Rs.11000 crore from the issue, but also defer the disinvestment target set by the finance minister in the Union Budget 2011.