IOC, BPCL to HPCL: Why are OMC stocks nosediving? EXPLAINED | Stock Market News

Shares of state-run oil marketing companies (OMC) such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) tanked up to 7% on Monday.

HPCL share price plunged as much as 7.58% to ₹318.70 apiece, BPCL stock price declined 5.20% to ₹242.30, while IOC shares cracked as much as 4.30% to ₹120.10 apiece on the BSE.

OMC stocks extended losses after the Union Budget 2025-2026 documents indicated that the LPG subsidy amount was decreased to ₹12,100 crore for FY26 from ₹14,700 crore allocated for FY25.

According to Avinash Gorakshkar, Head of Research at Profitmart Securities, OMC stocks are falling for two reasons: the Petroleum Minister’s statement of LPG under-recoveries for OMCs and weakness in the Indian National Rupee.

“Today, Petroleum Minister Hardeep Singh Puri said that LPG under-recoveries for the OMCs, as of 9MFY25, stood at over ₹29,000 crore. This has worked as an instant negative sentiment against the OMC stocks in India,” said Gorakshkar.

Moreover, the US dollar index has been ascending continuously after the inauguration of Donald Trump as the 47th US President. This has put pressure on the Indian National Rupee, and today INR hit a new low and surpassed the 87 per USD mark, he noted.

“So, the market is expecting pressure on the balance sheet of the OMC companies due to the rising US dollar rates and LPG under-recoveries for the OMCs,” Gorakshkar said.

Meanwhile, according to Jefferies, the budgeted liquefied petroleum gas (LPG) subsidy implies OMCs will bear 69% of fiscal year 2025 under-recoveries, which will cap their earnings upside.

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