Hindustan Petroleum Corporation Limited (HPCL) slipped dipped 5% to Rs 364 on the Bombay Stock Exchange (BSE) in early morning trade on profit booking after the Union Cabinet on Wednesday approved the sale of its 51% equity in the company to Oil and Natural Gas Corporation (ONGC), which gained 3% in intra-day trade.
Since July 12, HPCL has outperformed the market by gaining 12% on reports that the merger with ONGC will be completed by the end of this fiscal year. ONGC had gained 1.7% as compared to 0.66% rise in the S&P BSE Sensex during the period. At 09:46 am; ONGC was up 2.4% at Rs 167, while HPCL trading 3.3% lower at Rs 371 on BSE.
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Shares of MRPL – a subsidiary of ONGC – slipped 2.5% to Rs 128 levels, after hitting high of Rs 133 in intra-day trade. On Wednesday, the stock had rallied 6.5% on the BSE.
The development, analysts say the only good news from the perspective of HPCL shareholders is that it will become ONGC’s subsidiary. As a majority shareholder in the company, it will be within the means of ONGC to leverage HPCL’s balance sheet, they say, and do not see the move to be value accretive for HPCL’s shareholders. Read More