Oil & Natural Gas Corp. will invest Rs 1,200 crore in its wholly owned subsidiary, ONGC Green Ltd., by subscribing to a rights issue of equity shares.
The proceeds from the rights issue will be used to fund the acquisition of PTC Energy Ltd., according to an exchange filing on Monday.
Last year, OGL signed a share purchase agreement with PTC India Ltd. to acquire a 100% stake in PEL, which operates 288.8 megawatts of wind power projects across Andhra Pradesh, Madhya Pradesh and Karnataka. ONGC's board has approved providing a Rs 75-crore corporate guarantee on behalf of OGL for PEL.
The investment is part of ONGC's broader strategy to accelerate its renewable energy transition and achieve net-zero emissions by 2038, the filing said.
OGL, incorporated in February 2024, with an authorised capital of Rs 100 crore, focuses on green hydrogen, hydrogen derivatives, carbon capture and various renewable energy sources, including solar, wind, hydel, tidal and geothermal power.
In March 2024, the company approved an additional equity infusion of Rs 99 crore in OGL, along with an in-principle approval for an investment of Rs 1,100 crore at a later stage to support its business expansion.
The company's net profit declined 31% to Rs 8,239.9 crore on a sequential basis in the third quarter of the current financial year.
Shares of ONGC closed 2.31% lower at Rs 234.35 per share on the NSE, compared to a 1.06% decline in the benchmark Nifty. It has fallen 13.16% in the last 12 months.
Twenty out of the 29 analysts tracking the company have a 'buy' rating on the stock, four recommend 'hold' and five suggest 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 31.4%.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
