ONGC acquires HPCL for Rs. 36,915 crore

The most-awaited merger of oil and gas majors ONGC and HPCL materialized, providing the government with a much-needed reason to rejoice. With the completion of the deal, ONGC acquired 51.11 per cent in HPCL for a consideration of Rs. 473.97 per share.  

The transaction was priced at a premium of 13.8 per cent to HPCL’s closing price on Friday, January 19, 2017. The deal amounted to Rs. 36,915 crore which provides significant funds to help the government achieve its divestment target for the fiscal.

While ONGC is yet to disclose the source of funds for the acquisition, it is expected to monetize its stakes in Indian Oil Corp Limited or GAIL (India) and also add more consolidated debt to its balance sheet. The total debt of ONGC stood at Rs. 55,681 crore as on March 31, 2017.  

On Monday, ONGC hit an intraday high of Rs. 206 per share, higher by 6.4 per cent. The stock hit an intraday low of Rs. 198 per share on BSE. The stock had hit its 52-week high of Rs. 212 per share on January 31, 2017 and its 52-week low of Rs. 155.30 per share on June 27, 2017.  

At 11:44 hours IST, the stock was trading at Rs. 200.95 per share, higher by 3.80 per cent on BSE on Monday. Meanwhile, the S&P BSE Sensex was trading at 35,611.68 level, higher by 0.28 per cent and NSE Nifty was trading at 10,903.55 level, higher by 0.08 per cent, respectively.