Finance Minister approves sale price and terms

The government is set to turn Oil and Natural Gas Corp (ONGC) into India’s first vertically integrated ‘oil major’ with presence across the entire value chain, following the acquisition of Hindustan Petroleum Corp Ltd (HPCL).

The Finance Minister has approved the price and terms-conditions of the sale of its 51.11% equity share in HPCL as proposed by ONGC. It was announced on 20Jan 2018 in New Delhi.

The Rs.36,915 crore acquisition will ONGC give significant mid-stream and downstream capacity as well as help attain economies of scale at various levels of operations.

The integrated entity will have advantage of having enhanced capacity to bear higher risks, take higher investment decisions and neutralizing the impact of volatility of global crude oil prices.

This consolidation will help HPCL in further leveraging synergy at various levels of vertical value chains and look for economic consolidation within and outside the Group.

In July 2017, the government has given in principle approval to ONGC proposal to acquire HPCL shareholdings.

As part of investment management strategy, the government decided to explore possibilities of consolidation, mergers and acquisitions within Central Public Sector Enterprises (CPSEs).

However, HPCL will continue to be a CPSE. fii-news.com