Based on the profit and loss statement of ONGC and followed repercussions in stock price of ONGC, we can expect the listing of OIL around 1065-1070. A full applications is very likely to get 73 shares. So, there is a profit of 1050 per full application. If you pay tax you would get post tax profit of Rs.700/-
Oil India Limited engages in the exploration, development, and production of crude oil and natural gas; transportation of crude oil; and production of liquefied petroleum gas in India and internationally. The company holds interests in various oil and gas projects located in India, Libya, Gabon, Iran, Nigeria, and Sudan. It also owns and operates approximately 1,432 km of cross-country crude oil pipelines. In addition, the company offers various technical services related to pipeline construction; specialized services, such as hot tapping, stoppling, and pipe cutting and shearing off services; and various operation and maintenance services. OIL India is the second largest in the field after ONGC.
The company is on the verge of expansion and the part of the funds raised through IPO will be utilised for the purpose.
The company's P/E is at 11 times FY09 earnings at the price of Rs. 1050 per share. ONGC is currently trading at P/E of 16 times to FY09 earnings. The company's success ratio compared to ONGC is far better. The success ratio in new findings of reserves for ONGC is around 36% whereas for Oil India it is around 62%. Further more operating margins of OIL India is better than ONGC.
With the strong fundamentals and future propects, we can expect OIL India listing to be around 1250-1350 levels and it may sustain levels around 1200. We cant expect OIL India to trade below 1200 levels.
Oil India is not like NHPC or Adani. On the listing day the response may not be that good, but if you hold for 2 -3 months then you can expect good returns.
The reason is economy is recovering all around the world and crude price is also going high and likely to settle at 80 to 90$ a barrel. OIL India has huge reserviours and as crude climbs it will benefit. It will closely follow ONGC price movements in general.
Changes of getting Firm allotment is high. Since in retail it is subscribed at 1.14 and in Employee Quota it is just 0.2 times. As per rule, if employee quota is not subscribed fully then the pending should be allocated to retail. Hence if people have applied even for 1 time then firm allotment is definite and people who applied for full will get 90 shares.
Expect the price around 900-950 in listing, even this price is costlier. Investors with long term vision may still stay invested but for 10 years (really long term) in order to get 50% profit.
Expect the price around 900-950 in listing, even this price is costlier. People with long term vision may still stay invested but for 10 years (really long term) in order to get 50% profit.