ONGC’s stock plunged to new depths on Tuesday, falling below Rs 100 for the first time in 15 years and ending the session at Rs 99.3 on the NSE. From being among the top firms in India, it now ranks 22 with a market cap of Rs 1.25 lakh crore. Since June 2014, the stock has lost 68% of its value; the fall has been particularly sharp in 2020 with a loss of 23%. That’s despite an attractive dividend yield of 7%.
The December 2019 quarter results were very weak with net profits nearly halving to Rs 4,152 crore and production of crude oil and gas falling. However, investors are more concerned about an equity overhang with the government expected to sell some of its stake.
Moreover, oil prices could remain subdued in the absence of demand recovery amid the US-China tariff war and the Covid-19-related problems.