Indian Oil Corporation(IOC) Offer For Sale (OFS) – Should you invest?

Indian Oil Corporation IOC Offer for Sale OFSIndian Oil Corporation(IOC) Offer For Sale (OFS) at 5% discount-Should you invest?


With good response from Dredging OFS of last week, Govt. of India is planning for Indian Oil Corporation (IOC) OFS on Monday i.e. 24th August, 2015. It would be only for 1 day. Indian Oil Corporation would be the 4th company to hit the markets under the government's disinvestment program this year. The government is selling Rs 9,500 Crores or 10% stake, in a public offer through offer for sale (OFS) or auction route. IOC share price was at Rs 394.45 yesterday at NSE (Friday) and Govt. of India has fixed floor price few minutes back at Rs 387 per share. Retail investors would get 5% discount on floor price. Should you invest in Indian Oil Corporation OFS?

Also Read: What are the lastest interest rates of post office small saving schemes?

Details of Indian Oil Corporation OFS


  • IOC Offer for Sale would open only for one day i.e. Monday 24th August, 2015
  • It would open at 9:15 am and closes at 3.30pm through separate window of BSE and NSE.
  • Govt of India has fixed the floor price at Rs  387 which is 1.9% lower than Friday's share price through its announcement to BSE. Note that Indian Oil Corporation share price has closed on Friday at Rs 394.45 per share (BSE).
  • Retail investors would get the discount of 5% on floor price. Means the price would be at Rs 367.65 (approx) per share for retail investors.
  • Govt of India is planning to sell overall 10% stake for which it would get Rs 9,500 Crores.
  • 20% of such shares is reserved for retail investors. 25% to mutual funds and domestic insurance companies and balance of 55% to institutional investors, domestic financial companies and foreign funds.
  • Retail investors can apply through their stock brokers / demat account for this OFS.
  • The government currently holds a 68.57 % stake in Indian Oil Corporation. After the 10 % stake sale, its stake would reduce to 58.57%
  • More details about this IOC OFS can be read at BSE announcements at this link

What is the purpose of the Indian Oil Corporation Offer for Sale (OFS)?


Govt. Of India plan to divest in several PSU companies. Dept of Divestment has been given a target of Rs 70,000 Crores for PSU divestment for financial year 2015-2016. This target contains Rs 41,000 Crores from minority stake sale and balance from the strategic stake sale. Minority stake sale happens through Offer for Sale (OFS).

How do you get a 5 % discount through this IOC OFS?


Govt of India has fixed the floor price at Rs 387 per share which is 1.9 % lower than Friday's share price. Retail investors would get the discount of 5% on floor price. When you apply through your demat account, you would be tagged as retail investors and discounted price would be automatically shown to you. If not, please contact your demat stock broker before applying. You cannot make any changes once you apply for that.

How is Indian Oil Corporation stock price in last 12 months?


  • On Friday, 21st August, 2015, IOC stock price closed at Rs 394.45 on BSE, down by 0.7%.
  • The 52-week high of the share was Rs 465.90 and the 52-week low was Rs 306.75.
  • One month back, it traded at a price of Rs 438 per share. Means in one month, IOC stock has fallen by over 10%.
  • One week back, it traded at a price of Rs 389 per share . Means, it moved 1% up in last 1 week.

Also Read: Should you subscribe to LIC New Children Money Back Plan?

Which stock brokers are recommending to buy IOC stock?


Here is a brokers recommendation in the last few weeks in Aug-2015. This would be helpful in buying IOC Offer for Sale.

  • Moneycontrol.com sentimeter shows 79% as BUY and 21% as SELL about IOC Stock.
  • Gaurav Bissa of LKP Securities in his recent stock recommendations says “My first recommendation today is a buy on Indian Oil Corporation  (IOC), I recommend going long on in the stock. The target for the same would be around Rs 415 keeping the stoploss at Rs 392. Having said that, I would again say similar, not only IOC but Bharat Petroleum Corporation and Hindustan Petroleum Corporation can also see good amount of jump from current levels. All the stocks in our oil marketing companies (OMC) can be kept on radar.
  • Chandan Taparia of Anand Rathi Securities recommends buying Indian Oil Corporation with a target of Rs 420-425.
  • Edelweiss Research is bullish on Indian Oil Corporation and has recommended buy rating on the stock with a target of Rs 433 in its research report dated August 13, 2015.
  • Vishal Malkan of malkansview.com says, "One can buy Indian Oil Corporation  (IOC) with a target of Rs 456."

Disclaimer: I am not holding these shares now as of 22nd August, 2015 and I have intent of buying shares during Indian Oil Corporation OFS on 24th August, 2015.

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Suresh
Indian Oil Corporation Offer For Sale (OFS) at 5% discount

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

9 Comments

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  1. Hi
    I’m new to investing. Heard about the ioc ofs. Am not seeing oil companies losing their prominence for atleast next decade or two. So am interested in the sale. But at the same time, spooked by some news regarding a global slowdown especially chinese market seeing a downfall (which has a great effect on Indian market as well). (Should we be concerned?)
    Some advice as on how to proceed, or what all things to look into would be of great help.
    Thanks a lot.

  2. Since book closure date in 26th Aug, OFS buyers will be eligible for a dividend of 6.6/share..

  3. I am new to investing, If i bid through my HDFC sec account at Rs. 387 at around 10am on 24th aug, would i be assured of the shares? Or is the OFS also same as normal trading shares? Prices keep fluctuating throughout the day? What price should I quote to guarantee shares? Please help.

    1. Mayur, It is similar to IPO where your shares would be allotted based on the subscriptions tomorrow. They would be allocated in a week or so and then you would be able to sell them. There is risk element that share price may go below floor price.

  4. I would suggest to stay away from Oil Companies these days as the oil prices are making bottom each day. Investors would be able to buy IOC share below the floor price soon.

  5. good investment i would like

    1. OFS hardly give good return, otherwise just government making people fools, what is the future of oils companies, after few year their will be no pertrol vehicle at all. This OFS just waste of time and money.

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