SumanSpeaks
The Government's Gift to ONGC — and Why It Matters for Drillers
Dalal Street is recalculating its math in offshore waters — but is the tide lifting all boats, or just the ones still afloat?
Oil and Natural Gas Corporation (ONGC) rocketed higher recently on news that the Government of India finally decided to do something sensible — it reduced the royalty burden on crude oil and natural gas production. Onshore crude royalties were cut from 16.66% to 10%, offshore crude from 9.09% to 8%, and natural gas from 10% to 8%. There was also chatter about reduced fears on windfall taxation, which further improved the mood on Dalal Street.
The market interpreted this — correctly — as a direct boost to profitability and cash flow for upstream producers. ONGC and Oil India Limited both rallied strongly. The street had a collective "Arre…" moment: earnings could jump without drilling one extra barrel. And since upstream sentiment was suddenly buoyant, the offshore drilling services sector caught a sympathy bid too.
Which brings us, quite naturally, to two very different characters in India's offshore drilling story — Jindal Drilling & Industries and Aban Offshore. Same sector. Very different destinies.
Incorporated in 1983 and headquartered in Gurugram, Jindal Drilling & Industries Limited (NSE: JINDRILL) is one of India's oldest independent offshore drilling services companies. It operates a fleet of jack-up rigs and provides offshore drilling, horizontal and directional drilling, and mud logging services — the unglamorous but essential machinery that keeps India's upstream oil and gas sector humming.
Its primary client is ONGC. The company's rig Jindal Supreme is deployed with ONGC under a three-year contract, and it recently acquired the jack-up rig Jindal Pioneer from Discovery Drilling Pte., Singapore for $75 million — funded entirely through internal accruals. No fresh debt. No dilution. Just old-fashioned cash management.
The financials aren't spotless. The December 2025 quarter saw a consolidated net loss of ₹33.39 crore — a reversal of the ₹65.95 crore profit in the same quarter a year earlier. Management has attributed a chunk of this to the reversal of a previously recognised litigation gain rather than any fundamental deterioration. A board meeting is scheduled for 22 May 2026, and the market will be watching.
Despite the quarterly blip, the bigger picture holds: the rig market is tightening, day rates are expected to inch higher, and the government's royalty cuts are structurally good news for the sector. Jindal, with its active ONGC contracts and fleet-expansion strategy, is positioned to benefit — eventually. The word "eventually" does a lot of heavy lifting in offshore drilling.
Chennai-based Aban Offshore Limited (NSE: ABAN) was incorporated in 1986 and, at its peak, was one of Asia's largest offshore drilling companies. It operated fleets of jack-up rigs, semi-submersibles, drill ships, and floating production units across Southeast Asia, South Asia, Latin America, West Africa, and the Middle East. Its stock once traded near ₹5,400 in January 2008. Today it floats somewhere in the ₹36–50 range. That is not a typo.
What went wrong? The classic story: aggressive debt-funded expansion, a collapse in global oil prices post-2014, and a balance sheet that eventually buckled under liabilities it had no business carrying. NCLT admitted Aban Offshore into the Corporate Insolvency Resolution Process (CIRP). An Insolvency Resolution Professional (IRP) is now at the helm — approving quarterly results where once a board of directors sat. The promoters are no longer in the driver's seat. Net worth is negative. Losses continue every quarter.
And yet — here's the peculiar alchemy of the Indian stock market — the moment offshore drilling stocks catch a bid, ABAN starts hitting upper circuits. Traders pile in, WhatsApp forwards multiply, and the stock surges from ₹28 to ₹90 in a blink before retracing with equal enthusiasm. It is not investing. It is theatre. Entertaining theatre, admittedly, but theatre nonetheless.
These two stocks are not comparable in any fundamental sense. They share a sector classification the way a bicycle and a Formula 1 car share the word "vehicle."
| Parameter | Jindal Drilling (JINDRILL) | Aban Offshore (ABAN) |
|---|---|---|
| Status | Operational, going concern | Under CIRP (NCLT) |
| P/E Ratio | ~7.68x (reasonable) | Negative (losses) |
| Net Worth | Positive | Negative |
| ONGC Tie-Up | Yes — active 3-yr contract | Historical; currently constrained |
| Market Cap | ~₹1,657 Cr | ~₹13–20 Cr (micro-cap ghost) |
| Stock Character | Cyclical, noisy, oil-price sensitive | High-beta speculative momentum play |
| Recommendation | Book profit / wait for zone | Avoid / pure trade, not investment |
Jindal Drilling is like an offshore rig itself: noisy, cyclical, oil-price sensitive, and prone to sharp rallies followed by equally irritating consolidations (corrections). It is not the smooth romantic hero stock that doubles quietly while you are on holiday. It requires active attention, a clear stop-loss, and the discipline to actually use it.
Aban is a different beast. It is a speculative momentum counter undergoing insolvency proceedings. Traders who know exactly what they are doing — and more importantly, exactly when to exit — can occasionally make money in it. Everyone else, statistically, does not.
After the sharp momentum burst triggered by the ONGC royalty-cut news, Jindal Drilling has entered what I call the momentum-extension zone. The comfortable accumulation phase is behind us. Risk-reward has shifted. Here are today's key levels:
| Level Type | Price Zone (₹) | Interpretation |
|---|---|---|
| Major Resistance | ₹720 – 740 | Strong supply zone; next big target if momentum sustains |
| Immediate Resistance | ₹665 – 675 | Key overhead resistance; partial profit-booking zone |
| CMP (Today) | ₹656.70 | Momentum-extension zone; not a fresh accumulation price |
| Immediate Support | ₹620 – 625 | First cushion on any intraday dip |
| Strong Swing Support | ₹590 – 600 | Important swing base; buy-on-dip zone for fresh entries |
| Positional Support | ₹560 | Structural floor; breach signals trend reversal |
The critical number to watch on the upside is ₹690. A decisive, volume-backed close above that level could trigger the next momentum leg towards ₹720–740. But in the current environment — with FIIs quietly exiting in tranches and global macro uncertainty doing what it does best (namely, being uncertain) — calling that move with conviction would be optimistic bordering on reckless.
ABAN is under CIRP, trades on 5% circuit limits, and has a market cap that your neighbourhood kirana store owner might consider manageable. Quoting precise technical levels for a stock in insolvency is a bit like installing a premium sound system in a car with no engine. But traders will trade, so here are the reference bands — treat them as approximate, not gospel:
| Level Type | Price Zone (₹) | Note |
|---|---|---|
| Major Resistance | ₹28 – 32 | Historical consolidation area; speculative target only |
| Immediate Resistance | ₹22 – 25 | Upper circuit zone likely to cap near-term upside |
| Current Range | ₹18 – 20 | Highly volatile; circuit-bound moves in both directions |
| Immediate Support | ₹16.5 – 17.5 | Lower circuit band; buyers typically emerge here |
| Strong Support | ₹13 – 14.50 | 52-week low territory; panic bottom zone |
⚠ ABAN is under CIRP. Price moves are largely sentiment and operator-driven. These levels are indicative only and can gap violently in either direction within a single session.
Let's get to the point — because your time, like offshore rig day-rates, is expensive.
On Jindal Drilling (JINDRILL) at ₹656.70:
At the current price, Jindal is no longer in the comfortable accumulation zone. It has entered a momentum-extension phase — a polite way of saying the easy money has already been made. If you are sitting on strong profits after the recent spike, partial profit-booking near the ₹640–675 resistance zone is not irrational. It is, in fact, rather sensible. In this market, sensible is underrated.
If crude remains firm and the government continues its upstream-friendly posture, offshore drilling stocks could continue to outperform for some time. But "some more time" and "FII selling pressure" do not coexist comfortably in the same sentence — or the same portfolio.
SumanSpeaks recommendation on JINDRILL: Book complete profit at current levels. Then wait — either for a breakout above ₹675 on healthy volume for a fresh momentum entry, or for the stock to retrace to the ₹590–625 support zone for a considered re-accumulation. Patience is the one strategy that never hits a lower circuit.
On Aban Offshore (ABAN):
If you are a seasoned momentum trader with strict stop-losses, lightning-fast reflexes, and the emotional constitution of a stoic, ABAN can occasionally deliver quick returns in a hot sectoral environment. For everyone else — and that includes most of the SumanSpeaks readership — ABAN is best watched from the sidelines with a cup of chai (tea) and the quiet satisfaction of knowing you are not the one who will be left holding a lower circuit ticket when the music stops.
This article is published on SumanSpeaks (sumanspeaks.blogspot.com) purely for educational and informational purposes. It does not constitute investment advice, a buy/sell recommendation, or a solicitation of any kind. The author is not a SEBI-registered investment advisor. All views expressed are personal and based on publicly available information. Markets are subject to risks — including the risk of being spectacularly wrong at the worst possible moment. Please do your own due diligence, consult a qualified financial advisor, and remember: no blog post, however witty, can substitute for your own judgment and a properly placed stop-loss. ABAN is under CIRP proceedings — treat any position in it as a high-risk speculative trade, not an investment. CMP data referenced as of 14 May 2026.
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