Rating agency CRISIL has assigned a CRISIL IPO Grade "4/5" to the proposed initial public offer (IPO) of Oil India Ltd (OIL), the nation's second-largest state-run explorer.

The grade rating indicates that the fundamentals of the IPO are above average relative to the other listed equity securities in  India.

India's second-biggest state-run oil producer after ONGC, Oil India will offer 2.64 crore equity shares to the public in its initial offering, while the government will simultaneously sell 10% of its equity in the company to other state-run refiners.

Post-IPO and disinvestment, the government's stake in the company will decrease from 98.13 per cent to 78.5 per cent.

Oil India will hit the market with an initial public offering (IPO) on September 7, and the price band for the IPO is likely to be fixed on August 25.

The stake sale proceeds will be used to fund capex requirement for 2009-11.