A PROJECT REPORT ON

WORKING CAPITAL MANAGEMENT

OF
OIL AND NATURAL GAS CORPORATION (ONGC)
PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR THE AWARD OF THE DEGREE OF
MASTERS IN MANAGEMENT STUDIES
MUMBAI UNIVERSITY

Submitted By
ANKUR JAIN
(MMS- Finance)

METs INSTITUTE OF MANAGEMENT

MET COMPLEX, BANDRA RECLAMATION, BANDRA(W) MUMBAI-400050


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STUDENTS DECLARATION

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WORKING CAPITAL MANAGEMENT IN ONGC

Conducted at


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ACKNOWLEDGEMENT

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EXECUTIVE SUMMARY


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Products of ONGC are:

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METHODOLOGY USED

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CONCEPTS OF WORKING CAPITAL

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GROSS WORKING CAPITAL



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NET WORKING CAPITAL


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FACTORS DETERMINING WORKING CAPITAL

REQUIREMENTS

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ONGC is in the business of exploration and production (E & P) of
hydrocarbons. E&P business require large capital expenditure in the
development of platforms, rigs, pipelines etc. to extract the oil lying down
beneath the earth crust. so huge amount of money gets blocked in the form of
machinery forming fixed assets of the company. Hence, it can be said that
high initial investment is required in the business.

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Business Cycle Fluctuations

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In one of the worst global recessions witnessed by the world in 2008-09, ONGC has
not only stood up the pressure but also help the Indian economy to get back to the
track. There were not major fluctuations in the business cycle of ONGC and entire
working of capital management went swiftly.



Seasonal Operations
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Being an oil exploration & production company, operations of ONGC go on
throughout the year as demand of oil is very high as compared to its supply.
So the requirement of working capital almost remains constant throughout
the year.
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Market Competitiveness
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In terms of the market competitiveness, ONGC has the major chunk of

market share. Although there are some other E&P companies also working
such as OIL (OIL INDIA LTD.), CAIRNS ENERGY, RIL (RELIANCE
INDUSTRIES LTD.) but the very low production of crude oil by these
companies as compared to ONGC makes the ONGC nearly monopoly firm in
the market.



Credit Policy
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ONGC has the very strict credit policy for the OMCs such as IOC (INDIAN
OIL CRPORATION), HPCL (HINDUSTAN PETROLEUM CORP. LTD.),
BPCL (BHARAT PETROLEUM CORP. LTD.), GAIL (GAS AUTHORITY
OF INDIA LTD.). ONGC gives the credit period of 15 days for the supply of
crude oil and 7 days credit period for the natural gas.






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WORKING CAPITAL POLICY FOLLOWED AT ONGC

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CURRENT ASSETS
Conservative

Moderate

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SALES LEVEL

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INVENTORY MANAGEMENT


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Quantity required to be recouped should be = Max. (E.O.Q) stock dues on order +
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CASH MANAGEMENT


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RECEIVABLES MANAGEMENT


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BIBLIOGRAPHY

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