BPCL plans IPO of Bina refinery next year

The company plans to spend Rs 100,000 cr in next five years across its business verticals

Bharat Petroleum Corp Ltd (BPCL) is planning to launch an Initial Public Offering (IPO) of its Bina oil refinery next year, chairman and managing director S Varadarajan, said. IPO is the act of selling shares in a company for the first time.

BPCL, India's second-biggest state refiner, holds 50 per cent in Bharat Oman Refineries Ltd, which had built the unit. Oman Oil Company holds 26 per cent. The rest 24 per cent is with financial institutions. The refinery is located in Bina, Madhya Pradesh.

The Bina refinery turned profitable during the first quarter of the current financial year. Varadarajan said earlier this year, "We have approved a low-cost expansion and de-bottle-necking for the Bina refinery. The cost of this expansion is going to be about Rs 3,000 crore. We have sought the government's approvals for making fresh investment."

BPCL's partner, Oman Oil Company, will not be funding the expansion.  "The demand (for oil products) in the central and the northern parts (of the country) is very attractive. We need to meet the demand by moving products from the coast," Varadarajan told shareholders last month at BPCL's annual general meeting.

BPCL said it planned to spend Rs 1 lakh crore in the next five years across its business verticals. Of this, it said it would invest up to Rs 20,000-25,000 crore in the upstream segment. The refining segment would see an investment of Rs 35,000-40,000 crore, it said. The rest would be invested in marketing and city gas distribution, it said.

BPCL said it planned to reach a refining capacity of 1 million barrels per day by upgrading the Bina and Numaligarh refineries.

The BPCL board has already approved expansion of the Numaligarh refinery to nine million tonnes a year from the current three million tonnes a year. Varadarajan had said during the company's annual general meeting last month, "We have filed a proposal to the government, seeking capital subsidy for the same, as crude availability is a problem in the north-east, so we need to move the crude oil from the east coast to Numaligarh (Assam). There is an integrated plan for Numaligarh refinery of Rs 20,000 crore."