ONGC, India’s largest oil and natural gas Company owned majorly by the government of India, was in news recently for its announcements on the stocks of the company.

The company board had recently approved a Rs. 32 special dividend, along with a split to face value of Rs. 5 and also bonus of 1 share on every share the investor has. The company is also planning to come with a FPO to raise more money. The company’s major share holder was the state so it has gained a lot from the dividends recently.

However, investors now are a little worried over the risk factors of the company with the prices of crude rising unstoppably. ONGC in addition to that also has to payout a hefty royalty amount for its Cairn India assets, along with the ad hoc subsidy burden which is raising a concern on the minds of the investors.

These 2 factors of risk however vary in the degree of risk involved, as the royalty is only affecting the bottom line of the company, but the subsidy risk is seating up on the company’s returns, nevertheless they still are causing concerns for the investors.