The Indian Wire » Business » ONGC to buy HPCL instead of BPCL
Business News

ONGC to buy HPCL instead of BPCL

ONGC will buy HPCL at Rs. 42,254 crores instead of BPCL. Since ONGC found BPCL to be expensive than HPCL.

During the budget announcement, Finance Minister Arun Jaitley hinted towards hisedplans to create an integrated oil company. State-owned Oil and Natural Gas Corp (ONGC) seeks to acquire either Hindustan Petroleum Corp Ltd (HPCL) or Bharat Petroleum Corp Ltd (BPCL), however, if the latest reports are to be believed, ONGC is looking to acquire HPCL instead of BPCL, since they found BPCL to be expensive than the other.

BPCL has a market cap of Rs 1,01,738 crore and buying government’s 54.93 percent would have cost Rs 55,885 crore while HPCL has a market cap of Rs 54,797 crore but buying government’s 51.11 percent stake would cost Rs 28,006 crore.

ONGC has cracked a deal with HPCL to buy at Rs. 42,254 crores. ONGC is now purchasing 51.11 percent stake at Rs 28,006 crore while another Rs 14,000 crore or so would be required in case open offer has to be made. The company said ONGC has a cash reserve of Rs 13,014 crore and to fund the government stake acquisition in HPCL they will have to borrow at least Rs 18,000 crore.

This integration will add 23.8 million tons of annual oil refining capacity to ONGC’s side while making it the third-largest refiner in the country after IOC and Reliance Industries. Besides, ONGC already is the majority owner of MRPL, which has a 15- million tons refinery.

Reach out to The Indian Wire!

Want to work with us? Looking to share some feedback or suggestion? Have a business opportunity to discuss?

You can reach out to us at [email protected] and we will get back in minutes.

Like us on Facebook!