Investors of state-run Oil and Natural Gas Corp. Ltd (ONGC) have had little luck with the stock for some time now. Shares of the oil and gas producer have underperformed the Nifty 100 index in the past one year by 26%. Unfortunately, the lag in the stock performance is not entirely due to oil prices. Investors have been concerned that ONGC will have to share some portion of the subsidy burden of the sector.
For the nine-month period ended December, ONGC did not share any subsidy and made an oil price realization of $70 a barrel. However, this arrangement is not etched in stone. In fact, there is no formal agreement on the matter.
