ONGC shares continued to decline as crude oil rebounded but remained well off its recent peaks.
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Oil & Gas Natural Gas Corporation Ltd (ONGC) shares continued to decline on Wednesday, with the public sector major's stock falling close to five percent.At 2 pm, the ONGC share price quoted at Rs 163.3 apiece on BSE, down 4.5 percent from its previous close. In the last five sessions, ONGC has corrected over than eight percent.
The downtrend in ONGC comes as crude oil prices have eased from their recent highs amid hopes of progress in peace talks between Russia and Ukraine.
Brent crude futures were up 2.1 percent at $110 a barrel and WTI crude futures up 2.5 percent at $106.7 a barrel. Both hit two-week lows on Tuesday in anticipation of tightening supply after data showed US crude stockpiles fell sharply last week.
Meanwhile, the government is selling up to 1.5 percent in the state-owned company through an offer for sale (OFS), in a move that is expected to fetch it Rs 3,000 crore in divestment receipts. The non-retail portion of the OFS was fully subscribed on Wednesday.
The government owns a 60.41 percent stake in ONGC, which produces half of India's oil and gas.
Global brokerage Morgan Stanley has retained an 'overweight' stance on ONGC with a target price of Rs 263 per share. Going forward, the brokerage sees gas price hikes boosting the company's earnings amid tight supplies in the oil and gas markets.
The company is currently pricing in oil at $60/bbl and gas realisations stands at $4.10/mmBtu, according to Morgan Stanley.
First Published: IST