New Delhi: Shares of Oil and Natural Gas Corp. Ltd (ONGC) jumped more than 6% after the state-owned explorer has agreed to buy 51.11% stake in Hindustan Petroleum Corp. Ltd (HPCL).
ONGC shares rose 6.40% to Rs206 in early trading on BSE. At 11.13am, the stock was up 3.82% to Rs201, while the Sensex rose 0.25% to 35,605.75 points.
Shares of HPCL, however, fell 4.20% to Rs399.05 in the intraday trade on BSE. At 11.13am, HPCL stock was down 4.01% at Rs399.85.
ONGC on Saturday signed a deal with the President of India to acquire 51.11% stake in HPCL for Rs36,915 crore, ONGC said in a statement. The ONGC board cleared the proposal on Friday to buy 778,845,375 equity shares in HPCL at a cash purchase consideration of Rs473.97 per share. The purchase price is at a premium compared to HPCL’s closing price of Rs416.55 on BSE on Friday. The scrip closed trading 5.5 points or 1.34% up on Friday.
The deal is exempt from a public offer as both the entities are related parties but the transaction involving two listed entities have been carried out on an arms length basis, ONGC said.