The oil and marketing gas company ONGC is trading lower as it sought exemption from the government on buyback. The buyback programme is a broader part of the Centre's disinvestment scheme. And if the company engages in any such buyback the company will be hurt on its capital expenditure plan.
ONGC as at 1.19 pm was down by 1.4% at rs. 179.45 on the BSE.
It is after reports that government may ask the government entity to come up with a buyback plan which will have to be met by the company's internal cash reserves. Also, if the buyback happens, the company will not be able to declare high dividend this year.
Also, on the sidelines there are news that domestic natural gas price for the October -March 2019 period will be revised higher by anyway between 15-20% for the third consecutive time. And both the surge in crude oil price and domestic natural gas price hike will augur well for both ONGC and OIL.
Meanwhile, the morning gains on both the indexes have lost to cautious outlook of investors ahead of FOMC meet outcome.