ONGC spurts 5.5 % after minister comment on HPCL sale

Shares of ONGC rose 5.5 per cent on Monday after Oil Minister Dharmendra Pradhan said the state-owned firm was free to sell its stake in HPCL.

The scrip gained 4.73 per cent to close at Rs 135.20 on the BSE. During the trade, it jumped 5.65 per cent to Rs 136.40.

On the NSE, it rose by 5.50 per cent to close at Rs 136.10.

Amid reports of ONGC's inability to derive any benefit out of its HPCL acquisition, Oil Minister Dharmendra Pradhan on Monday said the state-owned firm was free to sell its stake in the oil refining and marketing company.

In its most expensive acquisition ever, Oil and Natural Gas Corp (ONGC) last year paid Rs 36,915 crore to buy government's entire 51.11 per cent stake in Hindustan Petroleum Corp Ltd (HPCL).

Despite being the majority stakeholder in the company, ONGC has only got one member on the board and virtually no say in the management.

ONGC had hoped that the addition of an oil refining and marketing company would make it a vertically integrated oil and gas company when it had acquired government stake in HPCL in January last year.

However, no tangible synergies have flowed to the company. The acquisition turned ONGC from a zero-debt company to a firm with no cash and a huge debt pile.