According to Tuesday’s regulatory filing, ONGC Green Ltd. has acquired 100% stake ownership from PTC Energy Ltd. (PEL) for an amount of ₹925 crore. This wholly owned subsidiary of Oil & Natural Gas Corporation (ONGC) will thus strategically enhance its presence within the renewable energy sector and in alignment with ONGC’s future decarbonisation and portfolio diversification aspirations.
Strategically Embedded Through Growing Investments in Renewable Energy
This acquisition complements ONGC’s stated objective of de-risking its portfolios from long-term disruptions through investing in clean energy and energy transition. Moreover, it was mentioned publicly that the company would ramp up investments in wind and solar energy projects, all to sustain demand in the world’s second most populated country.
PEL, founded as a subsidiary of PTC India Ltd., established in August 2008, has an operational wind power capacity of 288.8 MW over seven places in Andhra Pradesh, Madhya Pradesh, and Karnataka. The company has built 157 wind turbine generators at all of its sites and recorded an overall turnover of ₹322.5 crore for FY 2023-24.
Financial and Market Impact
ONGC announced that it has allotted 120 crore equity shares of ₹ 10 each in ONGC Green Ltd. through a rights issue subscription, further enhancing its financial muscle for renewable energy projects.
Following the acquisition announcement, ONGC stock prices settled up 0.72 percent at ₹226.76 on the NSE, bettering the benchmark, which declined 0.17 percent at close for the NSE Nifty 50. Nonetheless, ONGC stock has plummeted by as much as 18.76 percent in the past 12 months.
Out of the 29 analysts following ONGC, 20 have issued buy ratings, four hold ratings, and five sell recommendations, according to data compiled by Bloomberg. The average 12-month price target for ONGC’s stock points to a potential upside of 35.2%.
Future Prospects and Industry Outlook
The acquisition empowers ONGC to consolidate its position in India’s renewable energy market, which is witnessing extremely rapid growth fuelled by the ambitious clean energy targets the country has set itself. These include achieving 500 GW of non-fossil fuel capacity by 2030, which aligns with government aims and ONGC Green under this investment scheme.
By bringing the wind assets of PEL into its fold under its portfolio, ONGC Green prepares itself to play a crucial role in ensuring a quicker transition for India towards renewable forms of energy and reducing its dependency on fossil fuels. This also shows how ONGC is balanced out regarding its operations between an oil and gas business and through future-ready green investments in its corporate sustainability drive.
Conclusion
ONGC Green’s acquisition of ₹925 crore from PTC Energy is one of the strides towards renewable energy expansion, emphasizing its commitment to India’s clean energy changes. Indeed, as ONGC entrenches itself towards diversifying its energy sector portfolio, it will be capitalising on growth opportunities in the renewables sector for sustainability and value creation in the long run for stakeholders.
