Government likely to sell its stake in HPCL

India Infoline News Service | Mumbai | June 13, 2017 15:24 IST

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). In his budget speech, Finance Minister Arun Jaitley asserted that the government wants to create an organisaton in the energy space which could compete with international players.
 
According to CLSA, ONGC had a total debt of Rs 55,682 crore and cash of Rs 16,648 crore as on March 31, 2017. 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.
 
ONGC may also consider selling its stake in the Indian Oil Corporation Ltd. (IOCL) to mobilise funds for the HPCL buyout. It will become the country’s third-largest refiner after IOCL and Reliance Industries Ltd.

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