New Delhi: State refiner Hindustan Petroleum Corp Limited (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), the refining arm of ONGC, will not merge into a single listed entity this financial year, says a source aware of the development. "At this pace, the deal is unlikely to happen in FY19. Neither the MRPL board has taken up the proposal nor a consultant has been appointed in this regard."

Last year, ONGC-owned HPCL planned to merge its Mangalore Refinery and Petrochemicals Limited (MRPL), its subsidiary, with itself. The government had transferred its 51 percent stake in HPCL to ONGC for Rs 36,915 crore.

ONGC, India's largest oil and gas producer, maintains HPCL as an independent listed company under whom it can merge all its downstream units.

Industry experts believe HPCL will examine different ways to look at the deal. This includes examining a buyout of ONGC's shares, a share-swap deal or a mix of both. The buyout will likely cost HPCL an estimated Rs 9,000 crore, based on the current market capitalisation of MRPL.

"The synergy from the merger includes freight advantage in the west coast, and imports of crude for both the refineries," said Anshuman Agrawal, manager of Stratas Advisors, an American-based consulting firm.