IOC is already going in for a $550 million GDR issue in March, the proceedsof which could be converted into ADRs by the time the listing is done. Thecorporation will then comfortably go in for another ADR issue in 2000-01which sources say could be in the range of around a billion dollars.

The advantages accruing from an NYSE listing are a larger investor basewhich facilitates easier access to funds. "There are various mega projectsunderway which would require substantial resources. IOC will be able to dothis effectively once an NYSE listing is done," sources said. They addedthat a bigger market would result in greater trading in the IOC scrip andconsequently boost its price.

The Fortune 500 company will become the second PSU after Mahanagar TelephoneNigam to consider an ADR issue.

Government holding in IOC is presently 81 per cent which will be down to 71per cent after the GDR scheduled for March. Last January, the Oil andNatural Gas Corporation had bought ten per cent of the centre's stake in IOCfor Rs 1,700 crore in a cross-holding deal which saw the latter alsosubscribe to ten per cent in ONGC.

IOC's plans to go for a NYSE listing stem from the fact that it has drawn upa series of new projects in the ninth plan apart from expansion of existingones. The overall outlay is in the range of Rs 26,000 crore. The corporationhas also entered into a strategic alliance with ONGC to work in keypetro-related areas like exploration & production, power, petrochemicalsetc. All these are capital-intensive plans which will involve large funding,possible only through an ADR issue.

The corporation's GDR issue, slated for March, has been on the cards forover three years now. It was initially shelved owing to the oil pool crisiswhich saw the oil major's dues rising to a mammoth Rs 10,000 crore. IOC, atthat stage, was compelled to seek deferred credit for crude purchased fromONGC which worked out to Rs 1,700 crore.

If the GDR issue had gone through as planned, the next step was to go in fora ten per cent public offering which, at that time, would have raked in atleast Rs 2,000 crore. Even after the pool crisis was solved through theissue of oil bonds, the changes in government only delayed plans to hit theinternational market.

Even this time around, there have been reports doing the rounds thatinvestor appetite for the IOC scrip could be affected as Sinopac of China, alarge integrated oil company, made its global offering this month. Thegovernment is, however, categoric that there is no way the IOC disinvestmentschedule will be deferred and that it will be a key input to the target ofRs 10,000 crore set for the current financial.