Shares of ONGC rose by nearly 3percent after the company get govt nod to buy stake in HPCL

Oil and Natural Gas Corporation to double production in next five to six years.

New Delhi,July20: Shares of Oil and Natural Gas Corporation (ONGC) rose by nearly 3% on Thursday after the company got the Union cabinet’s approval to buy government’s stake in oil refiner Hindustan Petroleum Corp. Ltd (HPCL).

Defying its sluggish opening, the ONGC stock gained 2.91% to Rs167.80 on the BSE. On the NSE, the scrip went up by 2.97% to Rs167.85. The stock was the biggest gainer on the benchmark Sensex and the Nifty. Shares of HPCL, however, fell by 5% to Rs364.75

The cabinet on Wednesday approved sale of the government’s 51.11% stake in oil refiner HPCL to ONGC, India’s largest oil producer, for a potential Rs26,000-30,000 crore, a top official said.

The official said the cabinet headed by Prime Minister Narendra Modi gave in-principle approval to ONGC to buy HPCL.

ONGC, the official added, will not have to make an open offer to minority shareholders of HPCL as the government’s holding is being transferred to another state-run firm and the ownership is not changing.

The deal will be completed within a year, he said.