By Malvika Gurung
Investing.com -- The state-run oil and natural gas corporation ONGC (NS: ONGC ) has announced to invest about Rs 6,000 crore in ONGC Petro additions Ltd or OPaL, its petrochemicals arm, to meet the latter’s equity requirements.
ONGC already holds compulsorily convertible debentures in OPaL, which it would convert into equity worth Rs 6,000 crore. As per a Livemint report, the Centre-owned oil and natural gas corporation had been on the watch to induct a strategic partner in OPaL for a long time but due to no response from investors, it had to drop the plan.
The organisation was in discussions with investors until 2019, which included Saudi Arabia’s Saudi Basic Industries Corp. (Sabic) and Saudi Aramco (SE: 2222 ) to sell a 26% stake in its petrochemical arm. Consequently, ONGC made OPaL a subsidiary, and now has plans to integrate the arm with itself.
Driven by the increasing demand for petrochemicals, the contribution from the said sector would increase ONGC’s topline. At present, ONGC holds a 49.4% stake in OPaL, while the share is 49.2% for GAIL (NS: GAIL ) and 1.4% for the Gujarat State Petroleum Corporation Limited.
Once ONGC completes its investment of Rs 6,000 crore in OPaL, its stake in the company would rise by over 70%.
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