Govt plans to complete $4.5 bn HPCL share sale to ONGC this year

Govt said to plan completing $4.5 billion HPCL share sale to ONGC this year New Delhi: The government is planning to sell a stake valued at $4.5 billion in state-refiner Hindustan Petroleum Corp. to the country’s biggest explorer this year as part of its plans to create a state-owned oil giant, say sources. The government plans to sell its 51.1% holding in India’s third-largest refiner to Oil & Natural Gas Corp. and the final model for combining the two state-run companies will be decided in a few months, said the people on condition of anonymity. The oil ministry favours turning HPCL into a unit of ONGC instead of merging the two companies, one of the people said. Finance ministry spokesman D.S. Malik, ONGC and HPCL spokesmen declined to comment. India said in February it plans to create an oil giant through consolidation and mergers that could compare with international companies and withstand volatility in oil prices. The stake sale will also help the government meet its ambitious disinvestment target. The stake is worth Rs28,770 crore ($4.5 billion) based on Wednesday’s closing price, and will help meet 40% of India’s target to raise Rs72,500 crore target from asset sales in the year ending March. Prime Minister Narendra Modi’s administration exceeded the target for asset sales last year garnering Rs46,247 crore. HPCL shares fell as much as 2.4% to Rs54,095 crore while ONGC dropped 1.6% in Mumbai. The S&P BSE Sensex rose as much as 0.2%.