That amounted to a premium of about 14 per cent to Friday's closing price, and ONGC expects to complete the deal - first announced last July - by end-January.
HPCL shares fell as much as 3.8 per cent as the value of the deal was lower than market expectations. ONGC also said it would not buy shares from minority investors, contributing to the share fall.
Jefferies said it had expected Rs 500 per share, adding the deal would boost ONGC's earnings per share by 4-6 per cent, while leaving its valuations at just 8.5 times price-to-earnings for the 2019 financial year.
"ONGC will not be paying an egregious premium," the brokerage said in a note to clients. Local media reports had indicated ONGC could pay a higher premium. Jefferies retained its "buy" rating on ONGC and "underperform" on HPCL.
Meanwhile, Emkay Research said the deal would diversify ONGC's operations given that the company is focused mainly on exploration and production, while HPCL is focused on refining and marketing.
"Integrated companies tend to generate higher returns during a down-cycle in oil prices compared to a pure-play upstream company."
ONGC shares were up 4.2 per cent at 0529 GMT (10:59 am in India), compared with a 0.05 per cent gain in the broader NSE Nifty HPCL was down 3.5 per cent.
($1 = Rs 63.94)
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