The ONGC stock extended gains for the second day today on reports its board has approved exiting helicopter service provider Pawan Hans by selling its entire 49 per cent stake. The stock is the top Sensex gainer today rising 2.59% to 164.45 level on the BSE.
The large cap stock has been gaining over the last three days and has risen 6.69% during the period.
The stake sale in Pawan Hans is aimed at cutting debt and consolidating resources in core oil and gas business, officials with direct knowledge of the development said.
Oil and Natural Gas Corp (ONGC) wants its interest to be clubbed with the 51 per cent government stake that is already on offer for sale, they said.
The Department of Disinvestment and Public Asset Management (DIPAM), which floated the offer for sale for government's 51 per cent stake in Pawan Hans twice in the last 10 months, is likely to issue an amended expression of interest (EoI) shortly.
Officials said ONGC is of the view that its investment in Pawan Hans is no longer strategic as it charter hires helicopters to ferry staff to its oil and gas locations, mostly in offshore, through competitive bidding.
Of the 22 helicopters it currently has on hire, just seven or less than a third are from Pawan Hans. Pawan Hans owns a fleet of 46 helicopters.