Sources told NDTV that ONGC's overseas arm ONGC-Videsh Ltd (OVL), along with another public sector firm Oil India Ltd (OIL), may join hands to buy Videocon's stake in Mozambique gas field. Another PSU - BPCL - holds 10 per cent stake in the same blocks. (Read full story here)
Videocon shares traded 8.5 per cent higher at Rs 208.55 on the BSE as of 12 p.m. The stock earlier hit a day of Rs 226.95, while it closed at Rs 192.25 on Wednesday.
ONGC shares were down 1.2 per cent, while BPCL shares were flat, up 0.1 per cent. The broader Nifty traded 0.9 per cent lower at 19,468.
Officials, who did not want to be named, said the negotiations are on with Videocon on the valuation, which can be anything between $3-4 billion.
Sources say OIL is desperately looking to invest its cash reserves of Rs.30,000 crore, as otherwise it is likely that the government, which is the majority shareholder in the firm, may take away a big chunk of the cash in some form.
Energy firms are closely following the events in Mozambique as the country is now pegged to be 'floating on gas'. In fact, the block where BPCL and Videocon are present is said to be the biggest gas discovery made in decades.