Bloomberg Group Assignment, CorpFin 2019-20

Group No: 7 Industry Group: Energy

Student Name Roll No Company Name Ticker Country

(India or US)
Vaibhav Raulkar 1911128 PDC Energy Inc PDCE US US
Equity
Pavan Chandra 1911126 Gulfport Energy Corp GPOR US US
Equity
Lucky Kumar 1911112 Hindustan Oil HOE IN IN
Exploration Co Ltd Equity
Mohd Zia Arif 1911080 Chennai Petroleum MRL IN IN
Corp Ltd Equity

Analysis:

Company Name 𝜷𝑬 𝑬 (in million) 𝑫 (in million) 𝜷𝑨

PDC Energy Inc 1.498 1456 USD 2017.4 USD 0.715
Gulfport Energy Corp 1.457 431.2 USD 2723.2 USD 0.243
Hindustan Oil Exploration Co Ltd 1.097 11445.7 INR 1603.1 INR 1.005
Chennai Petroleum Corp Ltd 1.116 16298.4 INR 103090 INR 0.218

Average unlevered asset beta = 0.546

Unlevered asset beta is the beta of a company without the impact of debt. When we
compare company’s asset beta to average unlevered asset beta, Gulfport Energy Corp
and Chennai Petroleum Corp. Ltd have lesser asset beta value. This signifies that its
volatility of returns is relatively low in relation to the overall market . So, we can say that
it has less amount of risk involved and returns as compared to Hindustan Oil
Exploration Co Ltd (HOCL) and PDC Energy Inc.

When we look at USA and Indian market separately in energy industry, both companies
in USA have relatively low average beta asset value. Average unlever beta asset value
in USA is 0.479 and average unlever beta asset value in India is 0.611. This implies that
market is less volatile and risky in USA than in India. This is due to the exposure of
Indian markets to global market cycles which results in more foreign equity inflows and
increase the risk.

On the following pages, paste images of the 3 screen-shots, per company showing (i) 𝛽& , (ii) Total
Liabilities, and Total Equity, and (iii) and E.
1) PDC Energy Inc
𝛃𝐀 = 1.498

D+E = 4544.1 million USD

 Market E = 1456 million USD

2) Gulfport Energy Corp.

𝛃𝐀 = 1.457
D+E = 6051.0 million USD

Market E = 431.2 million USD

3) Hindustan Oil Corporation Limited
𝛃𝐀 = 1.097

D+E = 5435.2 million INR (2018)

 Market E = 11445.7 million INR

4) Chennai Petroleum Corp. Ltd

𝛃𝐀 = 1.116
D+E = 143060 million INR (2018)

Market E = 16298.4 million INR