ONGC Stock Price

History of ONGC:

Until 1955, only private companies were checking the oil in the Indian Subcontinent. In 1955, the Indian Government felt the requirement of exploring hydrocarbon resources for the strategic purpose. The discovery was initiated as part of the Indian Government's public sector development. An Oil and Natural Gas Directorate was set up in 1955. This Directorate came under the leadership of the Ministry of Natural Resources and Scientific Research. Since it involved a lot of land exploration, the Directorate hired many geoscientists who were part of the GSI.

The Directorate was progressed to the status of a Commission with enhanced powers since the Directorate would not have the financial and administrative controls to be a body that could function effectively. This Commission was then, converted into a statutory authority that would operate even more effectively by an Act of Parliament.

After this, ONGC initiated discovery in the subcontinent for oil reserves and found that there was oil in the Cambay Basin, Assam-Arakan Fold Belt and the East Coast basins. Around the 1970s, the company went offshore to locate oil, and Bombay High was discovered. All of these discoveries were enabled by the ONGC which had a team of Indian scientists trained from countries like the USA, West Germany, USSR, and Romania.

In 1993, the Oil and Natural Gas Commission was changed to the Oil and Natural Gas Corporation Limited and the government disinvested some of its shares in the company. In February 1994, the company was restructured as a limited Company. Then, over a period in which the ONGC formed strategic alliances with Indian Oil Corporation (IOC) and Gas Authority of India Limited (GAIL), government holdings in ONGC decreased to 84.11%.

After this, ONGC entered the global field and made investments in places like Sakhalin, Vietnam, Venezuela, Sudan, Columbia, and so on. The stakes were made by a sister concern of ONGC known as ONGC Videsh Limited.

Information About ONGC:

ONGC is the most significant oil exploration company and one of the biggest mining leaseholder in India.

Out of the seven basins that generate oil in India, six were explored by ONGC.

It is placed on the list of "World's Most Admired Companies" compiled by Fortune.

At present, ONGC produces around 70% of the total Indian production of crude oil.

It has produced over 1,743 Million Metric Tonnes of oil equivalent till date.

Management of ONGC:

The Board of Directors regulates the activities of ONGC. The responsibility of the Board includes implementing policies, devising strategies and reviewing performance. The Board is led by the Chairman, MD and six other full-time Directors. The Board also consists of nine Non-Executive Directors who are nominated by the GoI and a permanent invitee, the MD of ONGC Videsh Limited. The current Chairman and MD of ONGC are Mr. Shashi Shanker.

Listings and stock indices of ONGC:

Stocks of ONGC can be traded on the NSE and the BSE.

BSE: 500312; NSE: ONGCEQ; ISIN code: INE213A01029; Sector: Petroleum; Industry: Oil drilling and exploration

The company is part of indices like the Nifty 50, Nifty Energy, S&P BSE Sensex. It is also listed on the Cochin Stock Exchange Limited, MCX Stock Exchange, Madras Stock Exchange Limited, et cetera.

Wealth and recent performance of ONGC:

The total revenue of the company in the third quarter ending December 2017 of the fiscal year 2017–2018 was Rs.24,122.42 crore.

The total income for the third quarter of the fiscal year 2017–2018 was higher than the total revenue for the corresponding period the previous year.

The profit before tax for the third quarter of the fiscal year 2017–2018 was Rs.7,479.95 crore which was an increase over the PBT for the previous quarter which was Rs.7,234.29 crore.

The profit before tax for the third quarter of the fiscal year 2017–2018 was higher than the PBT for the same period the previous year which was Rs.6,252.42 crore.

Thus, the profit before tax saw a gain of over Rs.1,000 crore in a one year period spread out over two fiscal years.

The profit after tax expenses increased from Rs.4,352.33 crore in the third quarter of the fiscal year 2016–2017 to Rs.5,014.67 crore in the corresponding period in the fiscal year 2017–2018.

The total segment-wise assets of the company increased from Rs.241,813.10 crore in the third quarter of the fiscal year 2016–2017 to Rs.263,867.93 crore in the third quarter of the fiscal year 2017–2018.

The total segment-wise liabilities of the company increased from Rs.61,599.55 crore in the third quarter of the fiscal year 2016–2017 to Rs.68,931.90 crore in the third quarter of the fiscal year 2017–2018.

Stock performance in 2018:

The stock price opened at over Rs.190 in January 2018.

Over the course of the month, the stock gained steadily, reaching a high of Rs.210. This gain was observed in the third week of January.

Subsequently, the stock decreased in price ending at Rs.203 by the end of the month.

The stock opened at around Rs.194 in February 2018, ending the month at Rs.188 with a low of Rs.185.

The final price of the stock in February was a decline from the opening price. While it was not a steep drop, it was nevertheless a decrease.

The price has continued to decline further in March 2018 with the lowest price being Rs.180.

Why Invest in ONGC stocks?

ONGC is a Maharatna company indicating the strong performance of the company over a period. It is India's largest publicly traded company.

In fiscal 2015, the company made 22 discoveries, ten new prospects, and 12 new pools. It increased the earning potential of the company.

The company has invested in technology that improves productivity, decreased operating costs while increasing the profits.

It has increased its Western Offshore production by 7.5% potentially increasing revenue.

It has investments around the world and contracts for oil exploration and drilling. These investments and contracts could result in the extraction of a large quantity of oil that can be sold, leading to higher revenue and profits.

Around the world, the demand for oil and natural gas is not likely to reduce shortly. That demand will ensure that the price of oil and natural gas do not go down drastically.

The company has declared five dividends over the course of the last two fiscal years which indicates it a potentially good investment for the longer-term.

While some other reasons could be told, it would be better to perform personal research based on one's interests, financial status, and risk appetites.

Stocks or Mutual Funds: Here is our recommendation

A lot of research and knowledge is required in stock market investments, and generally, they don't offer any tax benefits. Hence at mymoneykarma, we merely motivate our readers to invest in mutual funds. Investing in mutual funds doesn't require a lot of knowledge, and equity-linked mutual fund schemes also provide tax benefits. In addition to it, since mutual funds contain stocks from multiple companies, they help in building a diversified portfolio.

Note: The contents of this post/blog do not constitute any professional advice on a specific financial matter.

Indexes and Exchages

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange, more popular as BSE, is the first and oldest stock exchange in Asia. Premchand Roychand, an influential stockbroker and businessman, ventured into this ambitious journey in 1855 with around 20 associates. They organized meetings at several outdoor locations before finally finding a permanent place in Mumbai’s Dalal Street. BSE was thus formally established in 1875. The exchange chiefly facilitated floor trading for a century before adopting an automated digital platform in 1995. The company has grown enormously ever since and has joined the United Nations Sustainable Stock Exchange as a partner exchange in 2012. BSE has also opened India's first international exchange, known as INX, in 2016.

National Stock Exchange (NSE)

NSE was mainly a Government of India initiative that aspired to bring transparency to the Indian capital market. A group of leading Indian financial institutions, upon the government's instruction, joined their resources to set up the exchange. Established in 1992, NSE was the first demutualized electronic exchange of India. It was the first exchange in India that operated on an entirely automated, digital screen-based electronic trading system. The platform offered an easy trading facility and connected the investor base of the entire country. NSE has immensely expanded ever since and currently extends its services to various segments, such as equity derivatives, trading, debt and currency derivatives, clearing and settlement services in equity, etc.

NIFTY Index

Launched on 1st April 1996, the NIFTY is NSE's flagship index that helps investment managers in tracking the behavior of a portfolio of certain companies. The list includes 50 companies from 12 different sectors out of the 1600 companies registered under the NSE. These are the 50 blue-chip companies owning the largest and most liquid Indian securities. Therefore, it is popularly referred to as the Nifty 50 and the index symbolizes the weighted average of the stock value of these 50 companies. The Nifty exposes investors to the Indian market through one efficient portfolio. The IISL or India Index Services and Products is a specialized company that focuses on an index as a core product and it owns as well as manages the Nifty.

SENSEX Index

Just like NSE's Nifty 50, BSE's stock market index is called Sensex. The word 'Sensex' is a combination of the words 'Sensitive' and 'Index.' It is also known by the names of BSE 30 and S&P BSE SENSEX. It comprises of 30 well-established and financially thriving companies among the ones listed on BSE. These 30 companies represent diverse industrial sectors of the Indian economy and have the largest as well as most actively traded stocks. SENSEX is extensively reported in national and international markets, through both print and electronic media. It has a scientifically designed indexing system which is based on internationally accepted construction and review methodologies. Since September 2003, a free-float market capitalization methodology is applied to calculate Sensex.