Indraprastha Gas Ltd, the sole supplier of CNG in Delhi, on Tuesday said it has obtained the approval of Foreign Investment Promotion Board for transfer of equity shares to non-resident Indians, foreign institutional investors and foreign venture capital funds in its proposed initial public offer.

"The selling shareholders, IL&FS, Infrastructure Development Co Ltd and Unit Trust of India, will be selling half of their shares, which amounts to 4 crore (40 million) shares (in the IPO)," an IGL press release said in New Delhi.

IGL will not receive any proceeds from this IPO, as this is an "offer for sale of the equity shares" held by the financial institutions.

"Everything is moving ahead on track, and our issue is likely to hit the market by the end of this month," IGL managing director A K De was quoted as saying.

The book running lead managers for the IPO are JM Morgan Stanley, Enam Financial Consultants and Kotak Mahindra Capital Company.

The Securities and Exchange Board of India had last month cleared the IPO of 3.5 crore (35 million) equity shares of IGL.

IGL is expected to come out with its IPO by November end.

Financial institutions plan to offload half of their 50 per cent shareholding in IGL through the IPO.

IL&FS, IDFC and UTI, which hold 20, 20 and 10 per cent stake respectively in the Rs 140 crore (Rs 1.40 billion) equity of IGL, propose to offload 3.5 crore equity shares in the market through the book-building route.

The issue may carry a floor price of Rs 30 per share and is expected to fetch anything between Rs 100 crore (Rs 1 billion) and Rs 150 crore (Rs 1.50 billion).

Post-IPO, FI's holding is expected to come down to around 25 per cent, while the promoters, Gail, BPCL and the Delhi government, will retain their current 50 per cent stake.

IGL has an equity base of Rs 140 crore, represented by 14 crore (140 million) shares of Rs 10 each. While Gail and BPCL hold 22.5 per cent equity each, IL&FS and IDFC hold 20 per cent each, UTI holds 10 per cent and the Delhi government holds 5 per cent. These institutions now plan to offload around 3.5 crore shares or around 25 per cent at a premium of Rs 20 per share to the public.