BPCL drops after Govt's nod to infuse funds into joint venture firm

BPCL fell 0.55% to Rs 975.45 at 12:39 IST on BSE after the Union Cabinet gave its approval to enhance investment by the company in the joint venture company Bharat Oman Refineries upto a maximum of Rs 3000 crore.

Meanwhile, the S&P BSE Sensex was down 261.28 points or 1% at 25,802.84.

On BSE, so far 21,000 shares were traded in the counter as against average daily volume of 86,213 shares in the past one quarter. The stock was volatile. The stock lost as much as 0.71% at the day's low of Rs 973.80 so far during the day. The stock rose as much as 0.61% at the day's high of Rs 986.90 so far during the day. The stock had hit a record high of Rs 994.20 yesterday, 27 April 2016. The stock had hit a 52-week low of Rs 704.40 on 13 May 2015. The stock had outperformed the market over the past one month till 27 April 2016, gaining 13.08% compared with Sensex's 2.87% rise. The scrip had also outperformed the market in past one quarter, advancing 12.71% as against Sensex's 6.42% rise.

The large-cap company has equity capital of Rs 723.08 crore. Face value per share is Rs 10.

Bharat Oman Refineries (BORL) is a joint venture company between BPCL and Oman Oil Company (OOCL). BORL proposes to undertake a de-bottlenecking project at Bina refinery in Madhya Pradesh to further increase the refining capacity from 6 MMTPA to 7.8 MMTPA. The estimated project cost is Rs 3072 crore, with an overall implementation schedule of 36 months from date of receipt of environmental clearances. The Union Cabinet yesterday, 27 April 2016, gave its approval to enhance investment by BPCL in BORL by an additional amount of up to Rs 3000 crore for completion of the de-bottlenecking project and for meeting the extraordinary losses suffered on account of the sharp fall in the prices of crude oil and finished products. The investment could be through subscription of convertible warrants/other instruments giving BPCL right to convert it into equity shares to be issued by BORL, according to a press release issued by the government after market hours yesterday, 27 April 2016. The infusion of funds by BPCL will enable BORL to overcome the implications on account of the erosion of the net worth, the statement said. Besides it will enhance the availability of petroleum products in the Northern and Central parts of the country, industrial development of Madhya Pradesh and substantial increase in employment and tax earnings in the state, the statement said.

BPCL's net profit jumped 170.1% to Rs 1488.60 crore on 19.5% decline in net sales to Rs 46613.14 crore in Q3 December 2015 over Q3 December 2014.

BPCL is a state-run oil refining-cum-marketing company. The Government of India held 54.93% stake in BPCL (as per the shareholding pattern as on 31 March 2016).

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