Why ONGC stock has fallen below ₹100 for the first time in 15 years
Shares of Oil and Natural Gas Corp. Ltd (ONGC) have fallen below ₹100 for the first time in 15 years and are trading at ₹99.30 on the National Stock Exchange.
Now, here’s a stock which offers a dividend yield of 7.5% and enjoys an earnings yield of more than 20%. Its market capitalization of ₹1.25 trillion is lower than three years of operating cash flow.
What explains this dramatic fall in confidence for shares of the state-run oil and gas producer?
True, December quarter earnings announced on Friday are disappointing. But investors have been agonizing about divestment of the government’s stake in the company. In the past two years, the government’s shareholding in ONGC has reduced to 62.78% in Q3 FY20 from 67.72% in Q3 FY18.
