Stock market analyst Nitin Murarka of SMC Global is of the view that investors can buy Indian Oil Corporation Ltd (IOC) stock with target of Rs 420.

According to analyst, the traders can buy the stock on dips to Rs 380-373 with stop loss of Rs 370.

The stock analyst also said that the suggested target can be attained in a period of one month.

Today, the shares of the bank opened at Rs 399.95 on the Bombay Stock Exchange (BSE). The share price has seen a 52-week high of Rs 418.10 and a low of Rs 258.75 on BSE.

Current EPS & P/E ratio stood at 42.10 and 9.29 respectively.

Indian Oil Corp has decided to unveil a follow-on public offer (FPO) by 2010 end after the administration permitted free market rating of petrol and a partial deregulation of diesel.

A senior IOC official stated, "The government's decision to allow free market pricing has encouraged us to look at the FPO plan. The FPO will provide the required cash for different projects and expansion."

The administration holds 80.35% equity stake in IOC, and a follow-on offer of around 10% by 2010 may be considered.

But, the concluding verdict and timing will rely upon different factors like the market situation, subsidy sharing mechanism and full freedom in diesel rating. The petroleum ministry will also have to clear the offer.

According to a representative, free market rating will result in a transparent mechanism, leading to a better assessment of the firm.

IOC, India's biggest retailer, is betting big on the follow-on offer to lift up funds for its growth plans.