In a significant move to expand its operations in the petrochemical sector, Oil and Natural Gas Corporation Limited (ONGC) has increased its equity stake in its subsidiary, ONGC Petro additions Limited (OPaL). This follows a rights issue subscription, with ONGC acquiring 490,62,03,065 equity shares of ₹10 each, worth ₹4906.20 Crore. As a result of this allotment, ONGC’s shareholding in OPaL has increased from 94.57% to 95.69%.

Strategic Investment in OPaL

The investment is in line with ONGC's broader goal of vertical integration into the downstream petrochemical sector. OPaL, a major player in the petrochemical industry, operates one of India’s largest petrochemical complexes. The rights issue offered to all existing shareholders, including ONGC, and the subsequent allotment strengthens ONGC’s foothold in the growing petrochemical market.

The company’s turnover for the fiscal year 2024 stood at ₹14,323 Crore, underscoring its substantial role in the industry. OPaL has a design capacity of producing 1.1 million metric tons per annum (MMTPA) of Polyethylene (PE) and offers a variety of other petrochemical products, including propylene and ethylene.

Impact of the Acquisition

The acquisition of additional equity shares increases ONGC's influence over OPaL, which will help facilitate better corporate governance and potentially optimize operations. As OPaL continues to produce essential polymers and chemicals, this move ensures ONGC remains closely aligned with OPaL’s growth trajectory. The continued focus on petrochemical products reflects ONGC's strategic vision of diversifying beyond its core oil and gas exploration and production activities.

Details of OPaL and Its Operations

Founded in 2006, OPaL operates a mega petrochemical complex located in Dahej SEZ, Gujarat. The complex is one of the largest of its kind in India, with a production capacity of 1,100 KTPA ethylene, 400 KTPA propylene, and several polymer manufacturing plants. OPaL’s product portfolio includes Linear Low-Density Polyethylene (LLDPE), High-Density Polyethylene (HDPE), and Polypropylene.

The company has a solid track record of growth, with turnovers over the last three years as follows:

• FY24: ₹14,323 Crore
• FY23: ₹14,628 Crore
• FY22: ₹16,065 Crore
  

  The Upcoming IPOs in this week and coming weeks are Nisus Finance, Emerald Tyre Manufacturers, Jungle Camps, Purple United, Rosmerta Digital and Avanse Financial.

  The Current active IPO is Ganesh Infraworld and Suraksha Diagnostic.

Governance and Approval Process

This strategic investment was approved by the Board of Directors of ONGC during their meeting on 25th September 2024. The investment plan includes additional equity investments in OPaL amounting to ₹10,501 Crore, subject to the government’s approval. The rights issue in which ONGC participated was offered to all existing shareholders and was carried out at arm's length, ensuring compliance with the SEBI regulations.

Future Prospects

As ONGC continues to increase its stake in OPaL, the two companies are poised to capitalize on the growing demand for petrochemical products, which play a crucial role in multiple industries. This acquisition positions ONGC as a stronger player in the petrochemical sector, enabling it to better meet market demands and contribute to the overall growth of India’s petrochemical industry.

For Further Updates: For more on the latest IPOs, share market trends, and corporate news, visit Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi. Stay updated with Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for expert stock market insights and calls, or Finance Saathi Telegram Channel for IPO updates.

**Start your stock market journey by applying for an IPO with a Free Demat Account in Choice Broking FinX.

This investment reaffirms ONGC's commitment to expand in the petrochemical space, creating a more integrated and sustainable future for both companies.