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ONGC may buy out government’s entire holding in HPCL
The Department of Investment and Public Asset Management (DIPAM) will shortly seek cabinet approval for Oil and Natural Gas Corp to buy the government’s entire stake in refiner Hindustan Petroleum Corp Ltd in line with the oil ministry’s proposal of creating a domestic oil giant, people with direct knowledge of the matter told ET.
The move is based on the recommendations of consultancy Deloitte, which the oil ministry had hired to suggest ways of restructuring state firms. The ministry has left it to the department of investment to decide on how the divestment in HPCL should be achieved, although it’s suggested the refiner be retained as a separate unit of ONGC, and not merged with it.
“The divestment of HPCL stake will help government generate resources that could be deployed for social welfare,” said one of the persons cited above.
The government owns 51.11% of HPCL and 68.07% of ONGC. At current prices, a sale of the entire HPCL stake could fetch the government about Rs 28,000 crore.The combined market value of ONGC and HPCL is Rs 2.76 lakh crore, or $42 billion, which is comparable with Rosneft’s $52 billion. Sam Steel Jersey
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