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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