ONGC said the company has approved the offer and issuance of unsecured, redeemable, non-cumulative, taxable, non-convertible debentures (NCD) aggregating to a total issue size of up to Rs 500 crore on private placement basis, as of 30 July 2020.
ICRA Ratings has assigned AAA stable rating to Oil and Natural Gas Corporation Ltd’s (ONGC’s) ₹5000 crore non-convertible debentures (NCDs) due to ONGC’s dominant market position in the domestic crude oil and natural gas production business with large proved reserves.
The rating agency considered the consolidated financials of the ONGC, including ONGC Videsh Limited (OVL), Mangalore Refinery and Petrochemicals Limited (MRPL), Hindustan Petroleum Corporation Limited (HPCL) and some of the special purpose vehicles undertaking forward integration projects, to the extent of any financial commitments made to the stakeholders.
This also shows ICRA’s outlook revision on ONGC group to stable from negative on account of recovery in crude oil prices from the lows of about $20 per barrel during April end to about $40 per barrel currently along with recovery in crude oil demand with the easing of lockdowns globally.
The company explored 19 of the 26 sedimentary basins of the country for their hydrocarbon potential via seismic survey and/or drilling and has established seven producing basins till date including Mumbai offshore, Cambay, Rajasthan, Cauvery, Krishna-Godavari, Assam-Arakan and Upper Assam. ONGC accounted for nearly 62% of the country’s crude oil production and nearly 75% of its natural gas production in FY2019.
The NCDs will be listed on the BSE (wholesale debt market segment). The tenure is four years, 8 months, 11 days from the date of allotment of July 31, 2020. The announcement was made after market hours yesterday, 29 July 2020. Shares of ONGC fell 0.56% to settle at Rs 79.50 yesterday.
“The company enjoys significant financial flexibility, given its large liquid investments, ability to raise both debt and equity capital from the capital markets at finer rates and the large value of its investments in IOC and GAIL (market value of the investments estimated at around Rs. 13,373 crores as on July 16, 2020),” said ICRA.
ONGC is India’s largest integrated oil and gas company. Its main operations include upstream exploration and production. It also has operations in downstream segments.