New Delhi: The cash reserves of state-run Oil and Natural Gas Ltd (ONGC) have plunged 98.24 per cent in just 18 months to reach Rs 167.42 crore as of September 2018. By the end of March 2017, the PSUs cash reserves including bank balances were Rs 9,510.78 crore, according to the company financial statements.
The slump in cash and bank balances comes on the back of the Centre's policy of pushing public sector enterprises to acquire stakes in other PSUs, give out more dividends or go for share buybacks to meet its own fiscal deficit targets, analysts said.
The policy of trying to meet fiscal deficit targets by means of the finances of state-run companies has severely hurt the country's largest oil explorer.
As per the company's financial statement for the quarter ended September 2018, the company's "cash and cash equivalents" were Rs 7.71 crore and "other bank balances" stood at Rs 159.71 crore, thereby taking the total cash reserves to Rs 167.42 crore. At the end of the financial year 2017-2018, the ONGC reported a cash reserve of Rs 2,385.98 crore.
A major blow to the company's financials came with its acquisition of Hindustan Petroleum Corporation Ltd (HPCL) last year for Rs 36,915 crore. This acquisition too was part of the government's efforts to meet its disinvestment targets. Although the ONGC funded part of the acquisition through its cash reserves, it had also borrowed over Rs 20,000 crore.