Raha: Value addition

Mumbai, Sept. 23: The Oil and Natural Gas Corporation (ONGC) expects its shares with Indian Oil Corporation (IOC) and Gail to be sold off in a calibrated manner. At the same time, it has shown its willingness to buy out Hindustan Petroleum (HPCL) in MRPL.

“We would like to calibrate the release of our stocks held by Gail and IOC into the market,” ONGC chairman and managing director Subir Raha said here today. He was concerned about the negative impact a sale of holdings by the two PSUs would have on ONGC’s stock price. “The effort is to create value, not destroy it.”

Hawking the 11.5 per cent stake that IOC and Gail hold could send ONGC shares into a tailspin. Analysts reckon that the share, not the most liquid ones around, could sink if a massive chunk of holding swirls around.

ONGC has trumped several big names to emerge as the stock with the highest market capitalisation. At Rs 50,000 crore, its tally is Rs 10,000 crore more than Lever’s, the FMCG major that was in top spot until a few months back.

ONGC is not keen on shedding its stake in IOC and Gail, but the two PSUs want to sell the equity they hold in the upstream major to raise money for expansion. The crude producer has been boosted in recent months by high output prices and reports that its sale would fetch global prices.

The ONGC scrip ended at Rs 343.45 on the Bombay Stock Exchange (BSE), up from its previous close of Rs 340 on a relatively thin volume of around 49,582 shares.

MRPL control

ONGC officials said a decision on buying Hindustan Petroleum’s stake in MRPL could be days away. Earlier, HPCL chairman and managing director M. B. Lal had expressed his reluctance to quit MRPL amid anxieties about supplies of petro-products from its own refinery.

HPCL and the Aditya Birla group had invested Rs 471 crore in MRPL. ONGC acquired the Birlas’ stake, and has been since eyeing HPCL’s part of the equity. There are signs it could fork out a small mark-up for the shares.