Shares of this mid-cap PSU stock gained up to 3.82 percent on Tuesday after getting approval from its Board of Directors to contribute to a Joint Venture company. Year-to-date, the company’s stock has zoomed close to 31 percent.
With a market capitalization of Rs 30,471.79 crores, the stocks of Oil India Limited (OIL), a Public Sector Undertaking, closed at Rs 281 on Tuesday. The company’s scrip witnessed an intra-day high of Rs 288.10, gaining around 3.82 percent as compared to the previous close of Rs 277.50 apiece.
Such stock price sentiments were observed after the company through a regulatory filing with the Bombay Stock Exchange (BSE) dated 4th September 2023, intimated about the Board’s approval for equity contribution in incorporating a Joint Venture (JV) company named “North East Gas Distribution Company Limited” (NEGDCL).
With the main purpose of executing ‘City Gas Distribution’ (CGD) Projects, OIL’s share in the JV company is decided to be 49 percent with the remaining stake to be held by Assam Gas Company Limited (AGCL). For the above-mentioned stake of OIL, the company has decided to pay up to Rs 1,738 crores.
Digging into the financials reported by the company, the basic parameters such as the operating revenues as well as after-tax profits have fallen during the recent quarter with the former moving down from Rs 8,767.72 crores Q4FY22-23 to Rs 6,408.76 crores during Q1FY23-24, and, the latter falling from Rs 2,180.73 crores to Rs 1,303.76 crores keeping the timeframe the same.
The company’s shareholding pattern, as per the data available for the June 2023 quarter, shows the Promoters, i.e., the President of India, hold a 56.66 percent stake, and the Foreign Institutional Investors (FIIs) hold a 11.03 percent stake in the company.
Oil India Limited is engaged in the business of the exploration, development, as well as production of crude oil, liquefied petroleum gas, and natural gas. The company has built expertise in wellbore installation, servicing, operation, and maintenance of surface handling facilities.
Written by Amit Madnani
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