InvestorQ : Can you throw some light on the HPCL results for the Sep-20 quarter?
vaishnavi mhatre made post

Can you throw some light on the HPCL results for the Sep-20 quarter?

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vidhya Laxmi answered.
3 weeks ago
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Hindustan Petroleum or HPCL announced more than doubling of profits for the Sep-20 quarter even as the gross refining margins or GRMS remained robust. In fact the GRMs were closer to the $6/bbl mark, which is extremely attractive in the current juncture.

The bigger news was the buyback of 10 crore shares announced by HPCL at a maximum price of Rs.250 per share amount to Rs.2500 crore. This will be roughly 6.56% of the total outstanding shares of HPCL.

HPCL is currently a subsidiary of ONGC after they acquired the government stake in two years back. ONGC currently holds 54.7% in HPCL and after the buyback, the ownership of ONGC will come down from 54.7% to 51.1%.

This will indirectly reduce the effective stake of the government in HPCL, which it holds via ONGC. HPCL has no recent history of buybacks so this is definitely to help the government to raise funds and get closer to the divestment target. That is now inevitable with the LIC IPO likely to get postponed to the next fiscal year due to the procedural challenges.

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