Government Plans to sell its stake in HPCL to ONGC
DSIJ Intelligence / 14 Jun 2017
The government is reportedly planning to sell its stake in Hindustan Petroleum Corporation Ltd (HPCL) to Oil & Natural Gas Corporation Ltd (ONGC).
The government is reportedly planning to sell its stake in Hindustan Petroleum Corporation Ltd (HPCL) to Oil & Natural Gas Corporation Ltd (ONGC). Finance Minister Arun Jaitley, in his budget speech asserted that the government wants to create an organisaton in the energy space which could compete with international players.
ONGC had a total debt of Rs 55,682 crore and cash of Rs 16,648 crore as on March 31, 2017, according to CLSA. Therefore, if ONGC buys 51% stake in HPCL, it will only increase the company’s debt. The government will be the only gainer in this scenario.
In order to mobilise funds for the HPCL buyout, ONGC may also consider selling its stake in the Indian Oil Corporation Ltd. (IOCL). It will become the country’s third-largest refiner after IOCL and Reliance Industries Ltd.
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