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ONGC to invest Rs 6,000 crore in its petrochemical unit: Report

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ONGC initially intended to induct a strategic partner in OPaL. But talks with Saudi Basic Industries Corp and Saudi Aramco to sell a 26% stake in OPaL fell through on lack of interest from investors. Therefore, ONGC decided to make OPaL a subsidiary.

ONGC to invest Rs 6,000 crore in its petrochemical unit: Report
The Centre-owned Oil and Natural Gas Corporation Limited (ONGC) is planning to invest Rs 6,000 crore in its petrochemicals unit ONGC Petro additions Ltd (OPaL). The decision has been taken to meet OPaL's equity requirements, according to a Livemint report.
Vivek Chandrakant Tongaonkar, Chief Financial Officer, ONGC, told Livemint that the state-run crude oil and natural gas corporation already holds compulsorily convertible debentures in OPaL that would be converted into equity worth Rs 6,000 crore.
Currently, ONGC holds a 49.4% stake in OPaL, GAIL has 49.2% of the shares and Gujarat State Petroleum Corporation Limited holds 1.4%. However, following the Rs 6,000-crore investment, ONGC's share in OPaL is expected to rise by more than 70%.
The report adds that ONGC initially intended to induct a strategic partner in OPaL. It was also in talks with Saudi Basic Industries Corp and Saudi Aramco to sell a 26% stake in OPaL. However, the plans had to be shelved due to a lack of interest from investors. Therefore, ONGC has now decided to make OPaL a subsidiary.
OPaL, a joint venture promoted by ONGC and GAIL and co-promoted by Gujarat State Petroleum Corporation Limited, not only caters to the demand for polymers in India but also markets a substantial part of its produce in the international market. The company posted a net profit of Rs 1.19 billion during the second quarter of this fiscal.
Meanwhile, OPaL has also set up a greenfield petrochemicals complex -- with a capacity of 1.1 million metric tonnes per annum -- at the Dahej special economic zone in Gujarat.
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