The borrowing is part of a tie-up with the three banks- Punjab National Bank (PNB), Bank of India (BOI) and Axis Bank, which took Rs. 18,060 crores for part funding its acquisition cost of Rs. 36,915 crore equity shares of the Hindustan Petroleum Corporation Limited (HPCL).The acquisition would also create India's first integrated oil company.

The ONGC on Tuesday said that it has entered into loan agreements with the three banks- Rs. 10,600 crores with PNB, Rs. 4,460 crores with BOI and Rs. 3,000 crores with Axis Bank respectively.

The state-run company is likely to sign-up more loan agreements with the stakeholders to pay Rs 36,915 crores to the Government of India by the end of this month.

ONGC Chairman and Managing Director Shashi Shanker said in a statement, "The company's board has approved raising of the borrowing limit from Rs. 25,000 crores to Rs. 35,000 crores. This is also the first time that ONGC is in debt."

"We will use our (Rs. 12,000-13,000 crores) cash first and then the liquid assets and debt will be last," he had said. "This order can change because we won't sell the liquid assets in distress. Also, we have offers for over Rs. 50,000 crore debt at very competitive rates, both foreign currency and local," added Shanker, in the statement.

The government on January 20 entered into an agreement with the ONGC for the strategic sale of its equity share-holding in HPCL.

The government's 51.11 percent shares will be sold at a consideration of Rs. 36,915 crores, the Ministry of Finance had confirmed in a statement.

In this process, the company acquired significant mid-stream and downstream capacity and will attain economies of scale at various levels of operations.