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Bongaigaon in the limelight

Virendra Verma

MUMBAI, May 14

THE stock price of Bongaigaon Refinery and Petrochemicals Ltd (BRPL), a subsidiary of Indian Oil Corporation (IOC), has more than doubled in just one week in the wake of rumours of a possible merger with IOC. "IOC already has 74.46 per cent stake in BRPL and the merger is expected shortly," said a dealer.

Analysts also attribute the rise to the expected reduction in the excise duty on petroleum products which will help the public sector company.

BRPL has gained from around Rs 7 last week to the current levels of Rs 15.10, a gain of 115 per cent in just one week. Today the stock was locked in the 20-per cent upper circuit filter on the BSE with volumes of 11.15 lakh shares. On the NSE, it closed at Rs 15.15, up 20.23 per cent with volumes of 17.59 lakh shares.

Since the beginning of this month, volumes have increased from an average of around 50,000 shares each on NSE and BSE to over 8-10 lakh shares in the last one week.

However, some market players said that the over 100 per cent rise in just one week was a matter of concern and the investor should be cautious at these levels.

The Union Budget for 2002-03 had reduced the excise duty from 32 per cent to 16 per cent for refineries in North Eastern region. BRPL has refinery in Assam.

"The company is expected to benefit from the excise relief; but a turnaround in the current fiscal is unlikely," said an analyst with a foreign broking firm.

For the third quarter ended March 31, 2002, BRPL reported a loss of Rs 31.1 crore compared to a net profit of Rs 24.87 crore in the corresponding quarter of the previous year.

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