The Cabinet on Wednesday approved the sale of the government’s 51.11% stake in oil refiner HPCL to India’s largest oil producer ONGC for a potential sum in the range of ₹26,000 crore to ₹30,000 crore, a top source said.
While ONGC buying HPCL will help the government meet as much as 40% of its target for raising ₹72,500 crore in the current fiscal through stake sale, more deals in the oil sector including one where refiner Indian Oil Corppotentially buying out explorer Oil India Ltd. or Bharat Petroleum Corp. Ltd. merges with gas utility GAIL, may be in the offing.
‘MRPL takeover’
Oil Minister Dharmendra Pradhan is likely to make a statement on the deal as well as other potential mergers in Parliament on Thursday.
Pre-merger, HPCL is likely to take over Mangalore Refinery and Petrochemicals Ltd. to bring all the refining assets of ONGC under one unit.
ONGC currently owns 71.63% of MRPL while HPCL has 16.96%. HPCL buying ONGC stake’s will give the explorer ₹16,414 crore at Wednesday’s closing price.
The source said ONGC will not have to make an open offer to minority shareholders of HPCL as the government’s holding is being transferred to another state-run firm without change in ownership. The deal will be completed within a year, he said.
