The country's largest driller is working independently to arrive at a fair price for the deal.

Shashi Shanker, chairman and managing director of ONGC, said that the "advisors are working on what amount needs to be shelled out for the acquisition".

The deal, which was announced in July this year, has a proposed arrangement of ONGC acquiring 51.11% of government stake in HPCL, which is among the largest oil marketing companies in the country.

This will also help the government raise funds by monetising its share in the companies and using the proceeds from the sale in social and other sectors.

The government also aims to reduce the import of oil and gas by 10% in the next five years.

Meanwhile, JM Financial is said to have submitted a report to the government, putting the asset valuation of HPCL at around Rs 114,000 crore, which is about 70% higher than its current market capitalisation of Rs 66,000 crore. This would mean a higher outgo for ONGC as it would now have to spend around Rs 55,000 crore instead of Rs 33,000 crore which it had earlier envisaged.

Shanker, during a media briefing held on Saturday, said that there is a perception that the HPCL acquisition was thrust upon ONGC, which is not true.

He explained the rationale behind the move is the fact that there is fall in revenue in normal business set-up when the crude prices go down for an upstream company and the revenue goes up with the crude prices increase. Inversely, the revenue for downstream companies goes down when crude prices go up and vice-versa.

Therefore, in order to maintain a balance and insulate ONGC from the shocks of fall in revenue, the deal with HPCL is important.

The acquisition is expected to bring in synergies for both the firms as ONGC has over 15-million-tonne refinery in Mangalore Refinery & Petrochemicals Ltd (MRPL), but lacks retail presence. On the other hand, HCPL has over 14,400 outlets, but it is lacks refining capacity.

Petronet LNG, Indian Oil, GAIL, MRPL are the other companies in which ONGC holds stake, the combined value of which is around Rs 50,500 crore. ONGC may sell some of its shares in these firms to raise the money for HPCL acquisition.

On the development in government's move to offer up to 60% stakes in ageing oil and gas fields for extracting better returns with use of advanced technologies and capital, Shanker said that no such formal communication has been received and he would therefore not like to comment on it.