OIL IPO @ 950-1050

OIL is the second largest oil-and-gas company in India as measured by total proved plus probable oil and natural gas reserves and production explores, develops, produces and transports crude oil and natural gas onshore in India. Oil India also processes captive natural gas production to extract LPG. It has an international presence in exploration of crude oil and natural gas through participating interest in 17 exploration blocks in Egypt, Gabon, Iran, Libya, Nigeria, Timor Leste and Yemen.

• Produces — 24.95 million barrels a year or about 68,000 barrels a day (10 per cent of domestic oil production)
• In comparison, ONGC produces more than 5,50,000 barrels a day while Cairn India, which commenced production last week, will produce 1,75,000 barrels a day at its peak.
• Has ‘proved and probable’ reserves of 575 million barrels of oil, which will last 23 years at the current rate of production. The proven reserves alone will last 11 years at the current output level.
• Has gas reserves of 63.41 billion cubic metres, more than 93 per cent of which is located in the Upper Assam Basin.
• It produces 6.22 million cubic metres of gas a day, which was about 7 per cent of domestic gas output in 2008-09. In comparison, Reliance presently produces close to 40 million cubic metres of gas a day.
• The company is also a 26 per cent shareholder in Numaligarh Refinery and holds 10 per cent in Brahmaputra Cracker and Polymer Ltd., which is planning to set up a petrochemical project in Assam.
• Owns and operates as a common carrier, a 1,157-kilometer cross-country crude oil pipeline, on behalf of itself, ONGC and Bongaigaon Refinery and Petrochemicals (BRPL)

At a price band of Rs 950-Rs 1050, the P/E works out to 10.2-11.3 times on an EPS of Rs 93 for FY 2009 on post-issue equity of Rs 240.45 crore compared with ONGC's P/E (on FY 2009 EPS) of 15.6. ONGC is almost 10 times Oil India's size and will continue to trade at premium to Oil India

Invest in this mini ratn for 1 yr +....... Curently the grey mkt premium is around 110-125....
tgt 1400 +....