Shares of Hindustan Petroleum Corporation Ltd (HPCL) tanked over 5% on the BSE on news reports the state-owned Oil and Natural Gas Corporation (ONGC) may acquire HPCL in an about Rs 44,000 crore deal as part of the government's plan to create an integrated oil giant.
Reacting to the buzz, the stock of HPCL shed 5% to Rs 531 in intraday trade on the BSE. Stock of Bharat Petroleum Corporation Ltd (BPCL) also slipped nearly 3% to Rs 670. ONGC was trading flat at Rs 194.
Following up on Finance Minister Arun Jaitley's Budget announcement of creating an integrated oil company, India's biggest oil and gas producer ONGC may buy all of the government's 51.11% stake in HPCL, reported PTI.
This will have to be followed by an open offer to acquire additional 26% from other shareholders of HPCL.
"The government is looking at creating an integrated oil company and the idea is to merge an oil producer with a refiner," a top source told PTI.
There are only six major companies in the sector - ONGC and Oil India Ltd being the oil producers, Indian Oil Corp (IOC), HPCL and Bharat Petroleum Corp Ltd (BPCL) in refinery business and GAIL in midstream gas transportation business.
The rest such as ONGC Videsh, Chennai Petroleum Corp (CPCL), Numaligarh Refinery Ltd and Mangalore Refinery (MRPL) are already subsidiaries of one of these six PSUs.
(With inputs from PTI)