Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
25 June, 2018 05:51 IST
ONGC acquires 51.11% stake of President of India in HPCL
Source: IRIS | 22 Jan, 2018, 10.01AM
Comments  |  Post Comment

The Government of India has entered into an agreement with Oil and Natural Gas Corporation (ONGC) for the strategic sale of its 51.11% equity share-holding in Hindustan Petroleum Corporation (HPCL) at a consideration of Rs 369.15 billion.

During the review in February 2016, the Prime Minister, Narendra Modi underlined the need of efficient management of Government investments in Central Public Sector Enterprises (CPSEs). The Government accordingly expanded the approach from of disinvestment to investment and public asset management. As part of investment management strategy, Government decided to explore possibilities of consolidation, mergers and acquisitions within CPSE space. An announcement in this regard was made by the Finance Minister, Shri Arun Jaitley in his Budget Speech of 2017-18.

In line with the Budget announcement, ONGC (Q,N,C,F)* proposed to acquire the Government of India's existing 51.11% equity shareholding in HPCL. (Q,N,C,F)* The Union Cabinet, in its meeting held on July 19, 2017, gave 'in-principle' approval to the said proposal and decided to set up an Alternative mechanism under the Finance Minister to decide on the price, timing and the terms and conditions of the strategic sale.

 The Alternative mechanism under the Chairmanship of the Finance Minister in its meeting today approved the price bid of ONGC and the terms and conditions of the sale.

 Through this acquisition, ONGC will become India's first vertically integrated 'oil major' company, having presence across the entire value chain. The integrated entity will have advantage of having enhanced capacity to bear higher risks, take higher investment decisions and neutralizing the impact of volatility of global crude oil prices.  In this process, ONGC has acquired significant mid-stream and downstream capacity and will attain economies of scale at various levels of operations.

Through this economic consolidation, HPCL will join as a member of an integrated oil and gas major group. This will help it in further leveraging synergy at various levels of vertical value chains and look for economic consolidation within and outside the Group. However, HPCL will continue to be a Central Public Sector Enterprise (CPSE).

Shares of the ONGC gained Rs 9.9, or 5.11%, to trade at Rs 203.50. The total volume of shares traded was 636,624 at the BSE (9.47 a.m., Monday).

Shares of the HPCL declined Rs 11.05, or 2.65%, to trade at Rs 405.50. The total volume of shares traded was 256,407 at the BSE (9.47 a.m., Monday).

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Company Update
DHFL expects 30% growth in home loan disbursements from Karnataka - 22-Jun-2018 11:22
KPIT, Kinetiq announce strategic life sciences collaboration - 22-Jun-2018 11:09
AstraZeneca receives marketing permission for Durvalumab in India - 22-Jun-2018 11:05
JSW Steel to invest USD 500 mn to upgrade Acero Junction plant in USA - 22-Jun-2018 11:01
HCL Technologies partners with Nokia for digital transformation - 22-Jun-2018 10:24
BHEL wins Rs 10 bn orders for emission control equipment - 20-Jun-2018 13:38
Tata Comm wins contract from BlaBla Connect - 20-Jun-2018 12:51
Infosys opens digital center of excellence in France - 20-Jun-2018 10:13
Shreyas Shipping & Logistics takes delivery of vessel 'M.V. SSL Krishna' - 20-Jun-2018 10:09
ABB partners with Cochin Shipyard and Shipping Corporation of India - 20-Jun-2018 09:57
ABB partners with Cochin Shipyard and Shipping Corporation of India - 20-Jun-2018 09:57
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer