Oil India — IPO: Don’t Subscribe

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Oil India’s IPO has received positive rating across all brokerages and pink papers. Some even forcefully recommend this IPO with reasons like “Unlike other recent IPOs, OIL has left something on the table for investors. Investors can subscribe at the cut-off price and hold the stock for the medium-term”.  Then why we didn’t recommend this issue?

Risk of owning a oil sector PSU is very high. This company needs to share the Govt.’s subsidy on petroleum products. Any increased terrorist activities and political instability in Assam  (95% of assets of this company located in Assam) would jeopardize the future of this company. Very poor management quality with red tapeisam. Wide expectation of this company would repeat the performance of Adani Power and NHPC.

We strongly recommend to Avoid. You won’t regret.

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