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ONGC Videsh Likely to Go for IPO: Is it the Right Time for it?

News

The Indian government wants to list ONGC Videsh, the overseas arm of top Indian oil explorer Oil and Natural Gas Corp, a company executive said. 

Source:  ET

SNP Insights

ONGC Videsh going for IPO, will generate substantial capital for the company, which can be invested in Company’s exploration & new assset acquisition projects. Presently as O&G market is undergoing through tough phase due to low oil prices, other upstream players are lowering down their investment; Hence equipment & labor cost will be available to ONGC at comparatively cheap rate. So raising investment at this time might benefit the company in the long run.

Yet as market sentiment for O&G sector is weak now, So share price at ‘first offering’ may go comparatively less, if ONGC- Videsh goes for IPO now. Hence Company has to go for proper ‘Risk- Benefit Analysis’ before going for Listing option.

Source: SNP Infra Research