Stock Market: ONGC, once the country's No. 1 company, is now behind even Zomato! Why has its valuation fallen?

News Topical, Digital Desk : ONGC, India's largest oil and gas producer, has a market value of ₹3.10 lakh crore. However, it lags behind food delivery company Zomato (now Eternal Ltd). Experts believe ONGC's valuation is undervalued, considering its subsidiaries and smaller investments account for more than a third of its market value.

At the close of trading on Friday, ONGC's market value was ₹3.097 lakh crore, which was lower than Eternal Ltd (₹3.36 lakh crore), Hindustan Aeronautics Limited (₹3.23 lakh crore) and Titan Company (₹3.13 lakh crore). According to BSE data, ONGC is now ranked 25th in market value.

In 2012, ONGC was India's most valued company, with a market value of ₹2.44 lakh crore. At that time, the company was ahead of TCS and Reliance Industries. In the last 13 years, ONGC's market value has grown by only 26%, whereas, other companies have seen a huge jump. 

Reliance Industries: From ₹2.43 lakh crore in July 2012 to ₹18.7 lakh crore now TCS: From ₹2.42 lakh crore in July 2012 to ₹10.95 lakh crore now The value of ONGC's subsidiaries and smaller investments is over ₹1.07 lakh crore, which is more than a third of its current market value. These include:
 

• 71.63% stake in MRPL: Over ₹18,000 crore
• 54.9% stake in HPCL: ₹52,770 crore
• 14.20% stake in Indian Oil Corporation: ₹31,000 crore
• 5% stake in GAIL (India) Limited: ₹5,900 crore

Valuation of State-owned Oil Companies
Last month, Petroleum Minister Hardeep Singh Puri said that state-owned oil companies (PSUs) are being undervalued by the market. He pointed to a "perception bias" among investors that unduly suppresses their market value. Puri pointed out that over the past six years, the three major oil marketing companies (Indian Oil, Bharat Petroleum, and Hindustan Petroleum) have collectively earned profits of ₹2.5 lakh crore. ONGC reported a standalone net profit of ₹1.16 lakh crore over the past three financial years and paid a total dividend of ₹12.25 at ₹5 per share.

Eternal Ltd (formerly Zomato): FY25 profit of only ₹527 crore, market value ₹3.36 lakh crore
Swiggy: FY25 consolidated loss of ₹3,116.8 crore, market value ₹1.08 lakh crore.

Market analysts say that ONGC's valuation review could reveal its true value, boosting investor confidence. Given the company's profitability, strategic investments, and significant role in the economy, its valuation could increase.

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