(LiveMint)
State-owned Oil and Natural Gas Corp. Ltd (ONGC) will not sell its stake in Indian Oil Corp. Ltd and GAIL (India) Ltd in the near future as it has used internal resources to repay close to a third of the ₹ 24,881 crore loan it had taken to buy Hindustan Petroleum Corp Ltd (HPCL), people with direct knowledge of the matter said. ONGC had in January received government approval to sell its 13.77% stake in Indian Oil and 4.86% stake in GAIL to help fund the ₹ 36,915 crore acquisition of HPCL.
“Indian Oil shares were trading at around ₹ 195 in January and it is now at ₹ 159 (Friday’s closing). It doesn’t make sense to sell the shares at such a big loss,” this person said, requesting anonymity. At Friday’s closing price of ₹ 159.60, ONGC’s shareholding in Indian Oil would be worth ₹ 21,343 crore as against ₹ 26,200 crore in January. At Friday’s closing price of ₹ 387.25, ONGC’s shareholding in GAIL was worth ₹ 4,244 crore.
“We are generating enough resources internally thanks to a rebound in oil prices. We used these to bring down the borrowing for HPCL acquisition to ₹ 20,000-21,000 crore in the first quarter and are repaying another ₹ 3,000-4,000 crore in the current quarter. Effectively, we have repaid ₹ 7,800 crore,” the person said.
