Indian Oil seeks nod to raise 20,000 crore through private placement of debentures

Mumbai: Indian Oil Corp. Ltd, the country’s largest oil marketing company, has sought shareholder approval to raise up to 20,000 crore through a private placement of debentures in 2018-19, said two people aware of the development.

The company plans to approve issuance of debentures through private placement at its annual general meeting on 29 August, it said in its annual report for 2017-18. It, however, did not specify how much. “To fund its various expansion plans, Indian Oil is planning this fund raise,” said a source requesting anonymity.

Indian Oil plans to invest 1.43 trillion in the next five years to expand projects across its business segments. Currently, the company has projects worth 32,000 crore in various stages of execution.

“As the leading refiner in the country and a dominant player across a diverse portfolio of offerings in energy, Indian Oil is focussing on all emerging opportunities for organic and inorganic growth through vertical integration and strategic diversification, besides pursuing value-creating research areas,” said Indian Oil chairman Sanjiv Singh.

Indian Oil plans to almost double its current refining capacity of 80.7 million metric tonnes per annum (mmpta) to about 150 mmtpa in the next 12 years. This includes greenfield refineries of its subsidiary Chennai Petroleum Corp. Ltd (CPCL) and the proposed Ratnagiri Refinery & Petrochemicals Ltd, apart from numerous brownfield expansions. The company currently owns and runs 11 out of the 23 oil refineries in the country.

“The Ratnagiri Refinery is proposed to be developed as the world’s largest integrated greenfield refinery-cum-petrochemicals complex. It will be built by an Indian consortium consisting of Indian Oil, BPCL, and HPCL along with Saudi Aramco and ADNOC (Abu Dhabi National Oil Company),” Indian Oil said in its annual report.

Indian Oil also has several pipeline projects under implementation on which it is spending 20,000 crore. Once these projects are completed, the company’s pipeline network would expand to about 20,000km in length. A 69-km pipeline is also being laid to transport petroleum products to Nepal.

The company plans to set up a textiles park in Odisha based on the feedstock available from its Paradip refinery.

For this, Indian Oil will infuse equity in Paradip Plastic Park Ltd, a joint venture with the Industrial Development Corporation of Odisha to promote downstream plastics-based units near Paradip Refinery. The current investment cycle includes 16,628 crore in upgrading refineries to produce Euro-VI emission norm compliant petrol and diesel by 2020 as against Euro-IV fuel being produced now.

The company is also investing 15,600 crore in the expansion of petrochemical projects and 74,600 crore in raising the capacity of its existing refineries. Another 36,500 crore worth of projects are in the pipeline but have not been approved by the board as yet.

“Looking at the future, the company is strongly focused on offering a bouquet of eco-friendly energy options other than liquid fuels to its customers. These would include natural gas, LNG, CNG, PNG, autogas, biogas, hydrogen, and electricity,” Indian Oil said.