ONGC gains as company to convert loan extended to offshore subsidiary into equity

ONGC rose 1.34% to Rs 233.80 at 11:15 IST on BSE after the company said that Cabinet Committee on Economic Affairs has given its approval for conversion of existing loan of Rs 5000 crore extended by the company to its offshore subsidiary into equity.

Meanwhile, the S&P BSE Sensex was up 258.33 points or 1.01% at 25,848.98.

On BSE, so far 88,000 shares were traded in the counter as against average daily volume of 4.16 lakh shares in the past one quarter.

The stock hit a high of Rs 234.60 and a low of Rs 231.10 so far during the day. The stock had hit a 52-week high of Rs 373.70 on 4 February 2015. The stock had hit a 52-week low of Rs 208 on 25 August 2015.

The stock had underperformed the market over the past one month till 22 December 2015, sliding 1.26% compared with Sensex's 1.07% fall. The scrip had also underperformed the market in past one quarter, declining 1.62% as against Sensex's 0.24% fall.

The large-cap company has equity capital of Rs 4277.75 crore. Face value per share is Rs 5.

The Cabinet Committee on Economic Affairs (CCEA) yesterday, 22 December 2015, has given its approval for investment of Rs 5000 crore by ONGC into the equity share capital of ONGC Videsh (OVL) by conversion of existing loan of equivalent amount into equity. The approved investment will strengthen the capital base of OVL. It will enhance the ability of ONGC to undertake overseas exploration and production (E&P) business, thereby improving the energy security of the country, a government statement released after market hours yesterday, 22 December 2015 said.

ONGC's net profit declined 11.1% to Rs 4842.02 crore on 1% growth in net sales to Rs 20563.19 crore in Q2 September 2015 over Q2 September 2014.

ONGC is India's largest oil and gas exploration firm by sales. The Government of India held 68.93% stake in ONGC (as per the shareholding pattern as on 30 September 2015).

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