ONGC looking to sell stake in other PSUs to fund HPCL acquisition

Dinesh K. Sarraf, the Chairman and Managing Director of the Oil and Natural Gas Corporation Ltd (ONGC), said that the firm is hoping to complete the selling of its existing stakes in other Public Sector Undertakings (PSUs) to partly fund the acquistion of the Hindustan Petroleum Corp. Ltd. (HPCL), by the end of December.

"There are many funding options available. We can look at market borrowings; we have some stocks we can sell," Sarraf said at a media conference.

Sarraf further stated that the Government of India and the ONGC both are working towards it.

"Today, we had an annual general meeting with the shareholders and we have taken their approval that we can at least borrow Rs. 25,000 crore from the market. We have about Rs. 10,000 crore of ready cash, and we will see further whether we need to dispose the shares off or not," he said.

Sarraf also asserted that the ONGC would become an integrated oil and gas company.

The ONGC chairman also said that the evaluation of such companies is high.

"So with the same profit, we will be valued higher by the market and our profits in any case will increase because of this energy," he had said.

According to reports, the ONGC owns 14 per cent stake in the Indian Oil Corporation (IOC) and a 5 per cent stake in the GAIL (India).

Sarraf had said that the HPCL would remain a separate-listed entity even after the completion of the acquisition, but will become a subsidiary of the ONGC.