ONGC Trails Zomato in Market Value Despite Strong Asset Holdings
New Delhi: State-owned Oil and Natural Gas Corporation (ONGC), valued at around Rs 3.10 lakh crore, currently lags food delivery company Zomato despite its stakes in subsidiaries and minority investments accounting for over a third of its market capitalization; This makes India’s largest oil and gas producer potentially undervalued.
The market capitalization of a listed company refers to the cumulative market price of all its shares. BSE data showed that ONGC was ranked 25th by market capitalization as of Friday close. According to BSE data, “The oil and gas major’s market capitalization was Rs 3,097 lakh crore, which is more than Rs 3.36 lakh crore of Eternal Ltd (formerly Zomato), Hindustan Aeronautics Ltd (Rs 3.23 lakh crore) and Titan Company (Rs 3.13 lakh crore) It was low.”
ONGC was India’s most valuable company in 2012, with a market capitalization of Rs 2.44 lakh crore, ahead of IT giant TCS and energy giant Reliance Industries. While ONGC’s market value has increased by only 26 percent in the last 13 years, other listed companies have seen significant jumps.
Reliance’s valuation rose from Rs 2.43 lakh crore in July 2012 to Rs 18.7 lakh crore as of Friday close. Tata Consultancy Services (TCS), which has competed with ONGC for the top spot in the past, has seen its market capitalization rise from Rs 2.42 lakh crore in July 2012 to Rs 10.95 lakh crore currently.
Reliance tops the list, followed by HDFC Bank (Rs 15.07 lakh crore), Bharti Airtel (Rs 11.05 lakh crore) and TCS. However, analysts argue that the market has not fully priced in the value of ONGC’s diverse portfolio, which includes significant stakes in offshore investment company ONGC Videsh, Mangalore Refinery and Petrochemicals Limited and other strategic assets.
ONGC holds 71.63 per cent stake in MRPL, which is valued at over Rs 18,000 billion. Its 54.9 per cent stake in refinery Hindustan Petroleum Corporation Ltd (HPCL) is valued at around Rs 52.770 billion. Additionally, ONGC has a minority stake of 14.20 per cent in Indian Oil Corporation worth Rs 31,000 billion and 5 per cent in gas utility GAIL (India) Ltd worth around Rs 5,900 billion.
