Deep Industries dipped 16% to Rs 256 on BSE yesterday on back of heavy volumes after receiving a show cause notice from ONGC pertaining to certain allegations made in respect of ongoing contracts. A combined 1.26 million shares representing 3.9% of total equity of the company changed hands on the BSE and NSE.
Deep Industries dipped 16% to Rs 256 on BSE yesterday on back of heavy volumes after receiving a show cause notice from ONGC pertaining to certain allegations made in respect of ongoing contracts. A combined 1.26 million shares representing 3.9% of total equity of the company changed hands on the BSE and NSE. There is a threat of getting blacklisted in case the company fails to prove ONGC's allegations wrong.
Currently Deep Industries is having an ongoing contract with ONGC on natural gas and air compression and has been awarded with three marginal gas fields since 2007 with a contract period of 17 years. In the past 2 years, the company has grabbed two contracts from ONGC of Rs 270 crore and Rs 247 crore, respectively. The company’s order book as of January 2017 shows Rs 790 crore worth of projects. If ONGC takes a decision to blacklist the company, then overall there would be an adverse impact on the revenue of Deep Industries as the company receives major contracts from ONGC.
Deep Industries Limited is an oil and gas company with well-diversified business segments like gas and air compression services, work-over and drilling rigs, gas dehydration services and oil and gas exploration and production (E&P).
