The government has given the go-ahead for oil and gas explorer Oil and Natural Gas Corporation (ONGC) to acquire the centre's 51 percent stake in retail company Hindustan Petroleum Corporation Ltd (HPCL). The cabinet will form a committee to work out on the modalities and the deal has been given a timeline of 1-year to fructify. After the acquisition, HPCL will remain a separate listed company and work as a subsidiary of ONGC.
In an interview to CNBC-TV18, Harshvardhan Dole of IIFL and RS Sharma, Former Chairman of ONGC shared their views on the merger.
IIFL's Dole said that ONGC-HPCL transaction will not be as simple as it is looking currently.
He further said that there is no reason to believe that the government will deviate from process set by Department of Investment and Public Asset Management (DIPAM).
Government deviating from set process may raise some questions, he added.
According to him, nothing changes from the perspective of HPCL shareholders.
He said that for HPCL it is a neutral event. The stock will see a re-rating if operation improves, Dole added.
IIFL continues to have a buy call on HPCL stock.
However, former Chairman of ONGC does not see any complexities in ONGC-HPCL deal.
According to Sharma, ONGC-HPCL deal is a win-win for both the companies as well as shareholders.
For entire discussion, watch accompanying video.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
