Bailing out govt: ONGC-HPCL deal has logic, but can't address fiscal woes

ONGC and HPCL are two companies that are run on vastly different management styles

State-controlled oil exploration giant, Oil and Natural Gas Corporation (ONGC), has entered into a share-purchase agreement with the President of India for acquiring 51.11 per cent equity in another state-controlled oil refining and marketing company, Hindustan Petroleum Corporation Limited (HPCL). The transaction will be completed by the end of the month, converting HPCL into a wholly-owned subsidiary of ONGC. This deal is different from ONGC acquiring an 80 per cent stake in one of the gas blocks of the Gujarat government-controlled GSPC in the Krishna-Godavari basin in December 2016. That deal was widely seen as a bailout for the debt-laden