ONGC share price rises over 4% after firm wins seven oil blocks

ONGC share price rose in trade today after the state-owned firm won exploration rights for seven oil and gas blocks. Share price of ONGC rose up to 4.21% to Rs 133.40 compared to the previous close of Rs 128 on BSE. Share price of ONGC has gained 0.63% in two days. However, the stock price has lost 10.13%  in one year and lost 0.04% since the beginning of this year.

Market capitalisation of the firm rose to Rs 1.61 lakh crore on BSE. The latest bid round for the sale of oil and gas blocks by the government saw eight bids.

"These 7 blocks are adding exploration acreage of 18,510 square kilometres spread over three sedimentary basins of India and have a resource potential of approximately 33 billion barrels of oil and oil equivalent gas," Oil Minister Dharmendra Pradhan said.

Upstream oil major ONGC put in bids for all seven blocks on offer, while Oil India Ltd expressed interest  for buying one block at the close of bidding on October 31, 2019. ONGC was the sole bidder in five blocks in Madhya Pradesh and one in West Bengal and was locked in competition with OIL in one block in Rajasthan.

Meanwhile, Goldman Sachs upgraded ONGC and Oil India to 'Buy'. The global brokerage firm has a target of Rs 175 for ONGC and Rs 205 for Oil India which translates into an upside of 36 per cent for ONGC and 34 per cent for Oil India.

Goldman Sachs said it has turned more positive on Indian upstream companies as free cash flow generation and dividend yield remain strong.