HPCL jumps 4% as ONGC board approves company takeover

NEW DELHI: Shares of HPCL jumped nearly 4 per cent on Tuesday after the board of ONGC gave 'in-principle' approval to acquire government's 51.11 per cent stake in the oil marketing company (OMC). Shares of ONGC inched up after the announcement.

Following the announcement, shares of HPCL rose 3.92 per cent to Rs 451.20 on BSE. It eventually closed the session at Rs 450.30, up 3.72 per cent. Shares of ONGC were trading 0.19 per cent higher at Rs 157.85 and ended the session 1.11 per cent higher at Rs 159.30.

The board constituted a committee of directors to "examine various aspects" of the acquisition and "to provide its recommendations to the board of directors", ONGC said.

HPCL will become a subsidiary of ONGC and will remain a listed company post the acquisition, the source told PTI adding that the board of the refining and marketing company will continue to remain in place.

The government last month had approved sale of its 51.11 per cent stake in oil refiner HPCL to India's largest oil producer ONGC. Prior to the merger, HPCL is likely to take over Mangalore Refinery and Petrochemicals Ltd (MRPL) to bring all the refining assets of ONGC under one unit. ONGC currently owns 71.63 per cent of MRPL while HPCL has 16.96 per cent stake in it.