ONGC buyout GOI’s entire 51.

11%
stake in HPCL
THE DEAL
On 20th January 2018, Oil and Natural Gas Corporation Ltd. (ONGC) Limited announced that
they will acquire government’s 51.11% stake in refiner and marketer Hindustan Petroleum
Corporation Ltd. (HPCL) for about Rs 36,915 crore in an all cash deal.
On 31st January 2018, India’s largest oil explorer bought 7.88 crore shares in HPCL for RS
473.97 per share. The acquisition was done in an off-market deal. ONGC was exempted from
making an open offer to existing HPCL minority shareholders. The individual identities of both
companies will continue to exist
In official press release ONGC said “The acquisition is in line with Government of India’s
objective to combine the various central public enterprises so that they have the capacity to bear
higher risks, avail economics of scale, take higher investment decisions and create more value
for the stakeholders and create an oil major which is able to match the performance of
international and domestic private oil and gas companies”.

THE COMPANIES BACKGROUND

Oil and Natural Gas Corporation Ltd. -
ONGC is the largest producer of crude oil and natural gas in India, contributing around 72 per
cent of Indian domestic production. ONGC's market capitalization as on 19th January, 2018,
was INR 248451 Crore. During the financial year ended 31st March 2017, ONGC Group had
produced 61.60 million tonne of oil and oil equivalent gas (mmtoe); the Consolidated Gross
Turnover was INR 142149 Crores, Consolidated Net Profit was INR 20498 Crore for the year
2016-17 and total oil and gas reserves were 2,142 mmtoe as on 31st March 2017.

Hindustan Petroleum Corporation Ltd. –

Hindustan Petroleum Corporation Limited refines crude oil and manufactures petroleum and
petroleum products. The Company's products, which are sold via outlets throughout India,
include lube products, lubricating oil, aviation fuel, hydraulic brake fluid, greases, liquefied
petroleum gas and insecticides. With a turnover of Rs 2,13,489 Crore and profit after tax of Rs
6502 Crore during 2016-17 HPCL ranks at 384th in Fortune Global 500 and 48th in Platts 250
Global Energy Companies

HPCL has the second largest share of product pipelines in India with a pipeline network of more
than 3370 kms for transportation of petroleum products and a vast marketing network
consisting of 13 Zonal offices in major cities and 106 Regional Offices.

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THE PROMOTERS
About ONGC:
In 1955, Indian Government decided to develop the oil and natural gas resources in the various
regions of the country. With this objective, an Oil and Natural Gas Directorate was set up in 1955
under the then Ministry of Natural Resources and Scientific Research.
In August, 1956, the Directorate was raised to the status of a commission with enhanced powers,
although it continued to be under the government. In October 1959, the Commission was
converted into a statutory body by an act of Parliament, which enhanced powers of the
commission further. The main functions of the Oil and Natural Gas Commission subject to the
provisions of the Act, were "to plan, promote, organize and implement programs for
development of Petroleum Resources and the production and sale of petroleum and petroleum
products produced by it, and to perform such other functions as the Central Government may,
from time to time, assign to it". ONGC went offshore in early 70's and discovered a giant oil field
in the form of Bombay High, now known as Mumbai High. This discovery, along with
subsequent discoveries of huge oil and gas fields in Western offshore changed the oil scenario of
the country.
After introduction of New Economic Policy in 1991, Government deregulate and de-license the
core sectors with partial disinvestment of government equity in Public Sector Undertakings. AS
a consequence thereof, ONGC was re-organized as a limited company under the Company’s Act,
1956 in February 1994

About HPCL:
Standard Refining Company of India Limited was incorporated in 1952, and its name was
changed to ESSO Standard Refining Company of India Limited (ESSO) in 1962. HPCL was
formed in 1974 pursuant to the acquisition of shares in ESSO by Government of India and
subsequent merger of ESSO and Lube India Limited. Thereafter, Government of India acquired
shares of Caltex Oil Refining (India) limited in 1976 and merged it with HPCL in 1978. Kosana’s
Company was merged with HPCL in 1979. HPCL is currently a Central Public Sector Enterprise
(CPSE) with majority shareholding (51.11%) by President of India. The equity shares of HPCL
are listed on the Bombay Stock Exchange and the National Stock Exchange.

THE PERCENTAGE OF SHAREHOLDING

ONGC Shareholding Distribution:
Category No. of Shares Percentage of Shareholding
Government Of India 8,690,032,256 67.715
Mutual Funds and UTI 338,206,845 2.635
Banks, Financial Institutions,
Insurance Companies (Central 9.899
1,270,399,841
/ State Govt. / Non-Govt.
Institutions)
FIIs and FPIs 786,771,555 6.131

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 Corporate Bodies including 11.411
1,464,404,341
Central / State Govt.
Indian Public 265,191,159 2.066
NRIs/Foreign Nationals/ 0.142
18,229,183
Clearing Members

HPCL Shareholding Distribution:

Category No. of Shares Percentage of Shareholding
Government Of India 77,88,45,375 51.11
Mutual Funds and UTI 13,44,74,216 8.82
Banks, Financial Institutions,
Insurance Companies (Central / 3.2
4,87,52,602
State Govt. / Non-Govt.
Institutions)
FIIs and FPIs 37,71,96,025 24.75
Employees 8,20,345 0.06
Indian Public 17,84,67,302 11.71
NRIs/Foreign Nationals/ 0.35
52,66,760
Clearing Members

THE PROFITS