 "Indian Oil Corp, iocl")
Indian Oil Corporation Limited (IOCL), the country’s top public sector oil-marketing company (OMC), on Friday approved the raising of Rs 22,000 through a rights issue of equity shares. The process will be “subject to receipt of necessary statutory approvals as may be required,” the company informed the exchanges after a meeting of its board.
The move is part of the government’s plan to infuse capital into three state-owned fuel retailers — Bharat Petroleum Corporation Limited (BPCL), IOCL, and Hindustan Petroleum Corporation Limited (HPCL) — to fund their net zero carbon emission projects.
Case in point, the board of BPCL had on June 28 approved raising up to Rs 18,000 crore through a rights issue. IOCL’s rights issue will also strengthen the company’s capex spending and the credibility of its emission-reduction plans. IOCL had last month doubled its authorised share capital to Rs 30,000 crore.
The government had in the annual Budget for 2023-24 (April 2023 to March 2024 fiscal) announced Rs 30,000 crore of capital support to the state-run fuel retailers to support their energy transition and net zero initiatives.
The government, which is the majority owner of the company, is likely to subscribe to the latest rights issue and infuse equity in the company. The company's shares climbed 2.63 per cent to hit a fresh one-year high of Rs 101.25.
IOCL is expected to report operationally strong June quarter results due to a sharp recovery in marketing margins, analysts have said. Prabhudas Lilladher expects margins to improve by Rs 9 per litre (blended margins) against Rs 3 in the March quarter.
It saw profit for June quarter at Rs 10,347.20 crore against a loss of Rs 1,992.50 crore in the year-ago quarter. Sales are seen falling 12.7 per cent year-on-year to Rs 1.95 trillion from Rs 2.24 trillion in the same quarter last year. Margin is seen at 9.1 per cent against 0.6 per cent YoY, Prabhudas Lilladher has said in its results preview note.
