Business Standard

Long-term subsidy sharing mechanism will do OIL good: T K Ananth Kumar

Interview with Director (finance), Oil India Ltd

Related News

Oil exploration and production company Oil India Ltd (OIL) is one of the divestment candidates where the government is planning to sell 10 per cent stake. It currently owns 78.43 per cent stake in the company. At the current price of Rs 504 per share, the may help the government raise around Rs 3,030 crore. , director (finance) at OIL, speaks to Ajay Modi about the company’s prospects and challenges, going forward. Excerpts:

The in 2009 was Rs 1,050 per share. After the earlier this year, the share price has come down. Will this ensure greater interest and participation?
OIL has become more visible after the bonus issue. has improved and volumes have picked up. We expect a good participation in OIL disinvestment if it is taken up this year.

OIL has performed well in FY12. What is the outlook for the current fiscal considering crude oil price is firm?
We have posted 19.40 per cent growth in net profit in FY12. We are expecting a growth of four per cent in crude oil production and 10 per cent in gas. Volume growth, firm crude oil price and weak rupee together, will help us perform well this year, too.

Will the lack of clarity on subsidy sharing affect the disinvestment or are the company’s fundamentals strong enough to negate the impact?
We have been regularly taking up the issue of lack of clarity in subsidy sharing with the government. This has been a continuous exercise. We hope some long-term mechanism is put in place. If this is done, it will improve the company’s working. However, as a company, our growth has been driven by strong fundamentals.

Tell us about some positive triggers for the company, going forward?
We are looking at an international acquisition. We are trying to invest in a producing asset so that it can generate quick revenues. This year we hope to do a deal and we are ready to invest Rs 6,000-7,000 crore.

OIL was recently in the news as it was keen to pick up stake in . What is the status? Why has the company dropped the plan?
Upon evaluation, we found it to be an expensive proposition and therefore, it was not fitting in our priority list. We are evaluating other opportunities in the areas of exploration and production.

What kind of preparations are on for disinvestment?
We have not been consulted so far. There has been no direction so far from the Department of Disinvestment. In case of disinvestment, government sells its stake and the company has little role to play.

Read more on:   
|
|
|
|
|
|

Read More

There is a lot of value in the market: Sandesh Kirkire

Despite the pessimism built around the lack of reforms and the waning investor interest in equities, Sandesh Kirkire, chief executive officer, Kotak ...

Quick Links

 

Market News

Cotton exports hit as China shifts policy

Raw cotton export may fall 20% in the next crop year as against 6% this year; rise in finished yarn exports adds to woes

Sugar exports: Industry restive over delays in subsidy revision

For February-March, the rate decided was Rs 3,300 a tonne; that for April-May was to be announced in the last week of March

Sugar output down 4%, says Isma

Indian mills had produced 1.54 mt raw sugar by the end of March and of that 850,000 tonnes was exported

Analysts' corner

India Cements' stand-alone return ratios have remained subdued over the years due to weak profitability

Jaimini Bhagwati: Are stock prices inflated?

Despite what partisan fund managers are projecting, the rise in the Indian equity market has to be evaluated carefully

Back to Top