Affiliate companies of the Reliance Group in India yesterday sold out their entire 0.6% stake in Oil and Natural Gas Corporation (ONGC). Under the sole books of Citigroup, the deal was priced at Rp845.1 a share, a 2.5% discount to the previous day's close of Rp866.75. The sale of 8.6 million shares raised some Rp7.3 billion ($166 million).
The deal was upsized from an initial level of 6 million shares but priced at the bottom of the 0%-2.5% discount range. The deal was launched at the close of Indian trading on Tuesday and crossed at yesterday's open.
Allocations saw 45 institutions come into the deal with half the accounts from Asia, 30% from the US and 20% from Europe. More than three quarters of those institutions were long only funds.
Yesterday morning the stock opened at Rp860 but quickly traded down to Rp854 during the crossing. By lunch it had traded up again to around Rp858, a 1% discount to the previous day's close.
The sellers had bought the stake in March 2004 during the follow on sale by the government that was handled by Merrill Lynch, Morgan Stanley and Kotak Mahindra. The price Reliance paid then was Rp750 a share, thus this sale saw them booking a profit of Rp818 million in little under a year.
In the last week ONGC's share price had been spiking up, moving from Rp810 to Rp860 in just a few days. It was this movement that prompted Reliance to sell.