Generally, to meet the requirement, companies
look at options like sale of shares held by promoters through a secondary market institutional placement programme, issuance of shares to the public, offer for sale, a rights issue or bonus shares to public shareholders. In addition to this, sale of shares held by promoters or promoter groups in the open market through block and bulk deal is another option that companies
generally switch to.
“If merger happens as planned, the shareholding issue will be solved,” ONGC chairman Shashi Shankar told Business Standard. With a merger, the new entity will automatically have more than 26 per cent of public shareholding. “Directionally, a merger between MRPL and HPCL brings value and makes sense. We are trying to do it within this financial year,” said Surana at a press conference after the March quarter’s results.
HPCL and MRPL together will have annual refining capacity of 35 million tonnes and a retail network of around 15,000. In April, there were reports that the finance ministry was planning to approach Sebi
for a relaxation to some state-owned entities from meeting the minimum public shareholding rule, including a few up for strategic sale. If MRPL gets a relaxation, the promoter will have enough time to complete the merger. Else, it will have to race against time to complete the process by August. Sebi
had given an exemption for ONGC from making an open offer last year, when it acquired 51.11 per cent in HPCL.
According to reports, to complete the MRPL deal, HPCL has three options before it. It can either buyout ONGC’s shares, which will come to the tune of around Rs 114.9 billion based on the current market cap or go for a share-swap deal and can go for a combination of both these options.