 "After board meeting, Indian Oil withdraws Rs 22,000 crore rights issue")
Indian Oil Corporation (IOC) attracted attention on Monday (September 30) following its announcement to withdraw its Rs 22,000 crore rights issue, Livemint reported. The company had earlier received approval for this capital raise through a rights issue, as indicated in a notification dated July 7, 2023, contingent on statutory approvals.
After a board meeting held on September 30, 2024, IOC decided to cancel the rights issue. This decision was influenced by a communication from the Ministry of Petroleum and Natural Gas (MoP&NG), which stated that no funds had been allocated for capital support to oil marketing companies (OMCs) in the 2024-25 Budget. An earlier proposal for a Rs 30,000 crore allocation was omitted from the final budget, prompting IOC’s decision against proceeding with the rights issue.
The company said, “In this regard, we would like to inform that the MoP&NG has conveyed that no funds have been allocated for capital support to oil marketing companies (OMCs) in the Budget 2024-25, as opposed to the previously proposed allocation of Rs 30,000 crore. Consequently, given the Government of India’s (Promoters) non-participation in the rights issue, the Board at its meeting held on September 30, 2024, has decided to withdraw the proposed rights issue of equity shares.”
Stock performance overview
IOC’s stock has witnessed a remarkable increase of 98 per cent over the past year and has surged by more than 38 per cent year-to-date in 2024. It saw a gain of 1.4 per cent in September following a decline of 2.6 per cent in August.
Currently, IOC’s shares are trading at 8.5 per cent below their peak of Rs 196.80, reached in February this year, and have risen over 110 per cent from their 52-week low of Rs 85.51, recorded in October of the previous year.