Weak demand for ONGC sale, until government entities step in

With 10 minutes to go, the deal is less than 4% covered, but after a last minute rush of orders, it appears the government will get its targeted $2.5 billion.

There had been a lot of hope that new regulations related to the sale of shares in listed Indian companies would improve the efficiency of the market and help increase the free-float and liquidity in a number of government-controlled companies in particular. But the first such offer for sale, which took place yesterday, cannot be described as anything but a huge disappointment.

The ingredients for a successful sale were all there. The target, Oil and Natural Gas Corp ONGC, is a well-liked blue-chip that is riding on the huge demand for energy in India and the government’s sale of an additional 5% stake would make it more accessible to...

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