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 closed 3.28% higher at Rs199.95 on BSE, while the Sensex ended 0.81% to 35,798.01 points. In intraday trade, the stock rose 6.40% to Rs206. Shares of HPCL, however, settled 3.55% lower to Rs401.75.
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.