ONGC-HPCL merger: A related-party transfusion with its own set of issues

The merger boosted govt coffers but ended the upstream oil major's status as a debt-free company

A day before the Union Budget for 2018-19 was to be presented, the state-owned Oil and Natural Gas Corporation (ONGC) completed the takeover of Hindustan Petroleum Corporation (HPCL) by buying out the central government’s 51.1 per cent stake in the company. In one stroke, Rs 369.15 billion was added into the government kitty for 2017-18, almost Rs 14 billion more than what the government added in the whole of 2016-17 through the sale of minority stakes in more than a dozen companies.

The strategic sale of HPCL to another state entity enabled the government to avoid all the potential