(FE)
Ahead of the Union Budget 2018-19 on Thursday, state-run oil explorer ONGC on Wednesday paid the government Rs 36,915 crore for its 51.1% stake in Hindustan Petroleum Corporation (HPCL), boosting the Centre’s non-tax revenues. ONGC acquired the government’s stake in HPCL in an off-market deal at a price of Rs 473.97 per share, the company said in a stock market filing. The oil marketing company’s shares closed at Rs 396.50 on the BSE on Wednesday, up 1.07% from the previous day’s closing price. “Several synergies are available through the acquisition…(complimentary asset portfolio, midstream and downstream presence and access to marketing network),” ONGC added. With the conclusion of the HPCL deal, the Centre has netted Rs 92,500 crore through disinvestment so far in the current financial year, against the target of Rs 72,500 crore for the full year. The Centre’s disinvestment proceeds this fiscal are poised to comfortably exceed Rs 1 lakh crore, more than double the level achieved last year.
With private investments still in the doldrums, the Centre has little room to cut capex this year. In this context, higher disinvestment revenues would help it avoid a fiscal slippage of more than 10-20 basis points from the Budget target of 3.2% of GDP in 2017-18. The acquisition will create India’s first vertically-integrated oil major as envisaged by finance minister Arun Jaitley in his Budget speech in 2017.
