Exemption of subsidy for upstream companies a big positive: RS Sharma, Former CMD, ONGC

In a conversation with ET Now, Former CMD of ONGC, RS Sharma talks about government removing the remaining 10% subsidy burden from upstream companies and his take on the same. Edited excerpts.

Government is trying to make the upstream companies more viable by removing the remaining 10% subsidy burden. Your views on that.
It is a very-very positive development coming after almost 12 years. It may not be a very substantial impact in terms of value of under-recoveries to be shared as they have been quite minimal. But, since the clarity came from the government, removing uncertainty, investors are going to lap it up. I see lot of positives coming from this going forward for ONGC.

Is this something slightly bigger than what you have seen in the past?
Yes, this removes very major uncertainty. When someone invests in a company, they take a long term call, they evaluate the ONGC stock. Analysts, see what is and how the company is performing, how is its EBITDA, bottom line, earnings etc. Until yesterday, they were not able to take a call because of the uncertainty. Now, one has a policy clarity that going forward ONGC will be spared the subsidy, which is a welcome move.