The Hindu Business Line : ONGC gains 12 per cent on dividend, stock-split hopes

THE stock price of Oil and Natural Gas Corporation (ONGC) flared up sharply in today's trading, ahead of the disinvestment of the company's shares. In today's trading, ONGC gained 11.97 per cent at Rs 9,191.05 on the BSE with a volume of 13.80 lakh shares and on the NSE it closed at Rs 919.30, up 11.83 per cent with a volume of 28.44 lakh shares. The today's closing was also the all-time high for the stock.

Since the beginning of this December 2003, the stock has gained 47 per cent from Rs 622.50 levels.

Brokers said the market is expecting a huge dividend shortly. In a notice to the stock exchanges today, ONGC said that is has fixed January 28, 2004 as record date for payment of interim dividend. The company has not, however, informed when the board will meet to decide on quantum of dividend.

According to market players, the company is likely to pay a dividend of 300-400 per cent (or Rs 30-40 per share). In addition, there has been talk of a stock-split from Rs 10 to Rs 2 or Re 1 face value before government disinvests.

Other than this, some players are also expecting the weightage of ONGC to increase in the BSE Sensex due to higher free-float.

Currently the weightage of ONGC is 2 per cent despite it being the most valuable company in India. After the IPO, the weightage is, however, likely to go up to 4 per cent, brokers said.

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