8 July, 2023 – Indian Oil Corporation Ltd (IOCL) announced on Friday that it intends to raise Rs 22,000 crore in capital through a rights issue of equity shares as part of the government’s strategy to inject funds into three state-owned gasoline retailers to support net zero carbon emission projects.
In a stock exchange statement, IOC stated that its board of directors has approved ”raising capital by way of issue of equity shares on rights basis up to an amount not exceeding Rs 22,000 crore, subject to receipt of all requisite statutory clearances.” The government, which owns the majority of the corporation, is likely to subscribe to the rights issue and invest in it. Bharat Petroleum Corporation Ltd (BPCL)’s board of directors met on June 28.
On Friday, IOC’s stock closed 0.8% higher at Rs 99.4 on the BSE.
In the annual Budget for 2023-24 (April 2023 to March 2024 fiscal), the government provided Rs 30,000 crore in capital support for state-run petroleum retailers BPCL, IOC, and Hindustan Petroleum Corporation Ltd (HPCL) to support their energy transformation and net zero activities.
To obtain the money, HPCL, which is majority held by the state-controlled Oil and Natural Gas Corporation (ONGC), is anticipated to make a preferred share issuance to the government.
IOC increased its approved share capital to Rs 30,000 crore last month.
The company also announced that its board of directors has approved the ”creation of a joint venture company for battery swapping business in India as a private limited company with 50:50 collaboration between IndianOil and Sun Mobility Pte Ltd Singapore (SMS)”. IOC stated that it would invest Rs 1,800 crore in equity through fiscal year 2026-27.
”The Board has also approved an investment of USD 78.31 million in IOCL Singapore Pte Ltd, Singapore (a fully owned subsidiary of IndianOil) for the acquisition of SMS preference shares and warrants,” the company stated. ”These investments are subject to statutory and regulatory approvals.”