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Our Bureau

Mumbai , Aug. 17

THE shares of Oil and Natural Gas Corporation rose by almost 5 per cent in Wednesday's trading due to active FII buying as they feel the stock is under-valued in the wake of firm crude price.

In Wednesday's trading, the stock closed at Rs 1,003.45 - up 4.96 per cent on the BSE with a volume of 7.71 lakh shares. And on the NSE, it closed at Rs 1,003 - up 4.77 per cent with a volume of 22.92 lakh shares.

Out of the total shares traded, 43.33 per cent was for delivery on the BSE and 45.36 per cent on the NSE.

Dealers said the rise in the stock price was due to buying from FIIs in Wednesday's trading. They said around 6-7 lakh shares were bought by FIIs.

Due to strong buying in ONGC, both the BSE Sensex and the NSE Nifty rose more than 1 per cent. ONGC has the highest weightage on the NSE Nifty, while on the BSE Sensex it is among the top five stocks in weightage based on free-float.

Several analysts tracking the company said the stock currently trades at 10 times its March 2005 earnings and it is under-valued compared to the Sensex price-earning multiple of 16 times for March 2005.

"Even after bearing oil subsidy with other petroleum companies, ONGC has been showing good growth and this is likely to continue in future too," said an oil analyst with a mutual fund.

He said the concern over the accident in the Bombay High rigs last month is also not much, as most of the loss is insured. "The only concern is the production loss for a few weeks. But this is a small amount considering the size of the company."

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