ONGC market-cap soars by Rs 2,850 cr

Jul 01 2011, 20:03 IST
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SummaryONGC stock today gained 5% after govt OK'd the Cairn-Vedanta deal.

Shares of Cairn India rallied on the Bombay Stock Exchange today and added a whopping Rs 2,850 crore to its market capitalisation after the government approved its deal with Vedanta.

The scrip opened on a weaker note but soon recovered and touched an intra-day high of Rs 327.95.

At the end of today's trading, the scrip was quoted at Rs 325.70, up 4.81 per cent and thereby added Rs 2,850 crore to its market valuations at Rs 61,953 crore even as the broader market closed in the negative zone.

"The uptrend in the stock is because the deal hangover which was there for the last 10 months is finally over and the uncertainty and regularity hurdles are now all clear," Ashika Stock Brokers' Research Head Paras Bothra said adding that the cost based royalty issue has also been factored in.

Meanwhile, Vedanta is trading 0.05 per cent higher to 2,095 pence, in London trading today.

The approval comes with the preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales.

Besides, Cairn India will have to withdraw the arbitration it has initiated disputing its liability to pay Rs 2,500 per tonne oil cess on its 70 per cent share in the field and the approval will be subject to ONGC and would also need the security clearance.

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