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Tuesday, Jul 09, 2002

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ONGC creates ripples at MRPL counter

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MUMBAI, July 8

OIL and Natural Gas Corporation clarified on Monday evening that it was only "considering" a proposal to acquire a stake in Mangalore Refineries and Petrochemicals Limited, a few hours after it informed the Bombay Stock Exchange that its board had "approved a proposal for the acquisition of majority stake" in the Mangalore-based refinery.

While ONGC described it as a "secretarial error," marketmen were not convinced as the explanation came after market hours. By then, 36 lakh shares had changed hands on the two premier exchanges - NSE and BSE - as against its 15-day average of 7.5 lakh shares. The share touched an intra-day high of Rs 12.65 before closing at Rs 11.90 on both the bourses. It had closed at Rs 11 on the BSE on Friday.

An ONGC spokesperson said, "The Secretarial department of ONGC had inadvertently informed the stock exchange that a decision has been taken on the matter, which is not factually right. No final decision has been taken and the proposal is only being examined."

Earlier, agency reports quoting Mr Subir Raha, Chairman, ONGC, said ONGC was mulling plans to buy the Aditya Birla group's 37.38 per cent stake in the loss-making MRPL.

A notice on the BSE in the morning said: "Oil and Natural Gas Corporation Ltd has informed BSE that the board of directors has approved a proposal for the acquisition of majority stake in Mangalore Refinery and Petrochemicals."

Subsequently, the stock price of the company surged by about eight per cent. Interestingly, the clarification from ONGC came only after the markets closed for the day, several hours after the first notice was issued. The fresh notice said: "Earlier, the company had informed that the board of directors had approved a proposal for the acquisition of majority stake in MRPL which stands withdrawn."

MRPL is a joint venture between the Aditya Birla group and the public sector HPCL. The Birlas' stake has been up for sale for quite some time now. HPCL had the first right of refusal for the stake. Talks between the Birlas and HPCL fell through after they failed to agree on the price for the holding.

Subsequently, there were also reports of the Reliance group showing interest in buying the Birlas' stake. The reports assumed credibility after the Ambanis sold their long-held stake in Larsen and Toubro to the Birlas.

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