Bongaigaon Flares Up On Merger Rumours

Bongaigaon Refineries went up by 12.68 per cent driven by rumours that the company might merge with Indian Oil Corporation (IOC). More than 8 lakh shares were traded on the BSE today.

The scrip opened at Rs 7.50, went up to a high of Rs 8 in intra-day trades to finally close at Rs 7.20, against the previous close of Rs 7.10. The scrip has been going up since the last two sessions and has gained nearly 33 per cent in two days. On March 15, the scrip was ruling at Rs 5.95. Volumes have also gone up from around 90,000-odd shares two sessions back to more than eight lakh today.

Dealers said there was a lot of speculative activity in the counter -- but market sources said the scrip could go up to Rs 15 in the near future. The reduction in excise duty from 32 per cent to 16 per cent is also expected to benefit the company as it would have to pay lower duties.

Bongaigaon, which refines crude oil from Assam, has a refining capacity of 2.35 million tonne per annum. It also manufactures petrochemicals, which are marketed by IOC.

The company is currently engaged in setting up new projects, such as a bottling plant for LPG, and hydro-processing of diesel among others. The government has also divested nearly 75 per cent of its stake in Bongaigaon to IOC making it a subsidiary of the latter.