The country’s second-largest public sector oil exploration company, Oil India Ltd, is set to go for Initial Public Offer (IPO) in a bid to raise Rs 2,772 crore, offering shares at Rs 1,050 per share.

The empowered group of ministers (EGoM), headed by Finance Minister Pranab Mukherjee, recently held a high level meeting to work out share price and to pave the company’s way for its listing on Indian bourses on September 30.

Petroleum secretary RS Pandey said that OIL will be second public sector Company to go for IPO after national hydro firm, NHPC, during the tenure of the present central government. OIL has already completed book building process that started on September 7 and closed on September 10.

The firm, having production capacity of 3.5 million tons annually, would reserve 60% of the shares for qualified institutional buyers, 30 per cent for retail buyers and 10 per cent for non-institutional buyers. 10 per cent of offer will be allotted to the general public, which will dilute the government’s stakes in the company from 98.13% to 78.5%.

A note by brokerage house HDFC Securities maintains, “OIL is offering shares at a valuation that translates into an EV/2P reserves (enterprise value divided by proven and probable reserves) of $4.1 compared to $5.4 for ONGC, $12.8 for Cairn and $7-8 for most international players.”