Indian Oil Corporation Ltd (IOC) announced on July 4 that it will consider raising of funds through rights issue of equity shares to meet the capital expenditure plan for its various projects at its board meeting scheduled on July 7. The issue, if considered, will be subject to various statutory approvals as may be required, said India’s leading state-owned oil refiner in a regulatory filing to the stock exchanges on Tuesday.
“As per SEBI (Prohibition of Insider Trading) Regulations 2015, the above, being Unpublished Price Sensitive Information requires closure of trading window for Insiders of the Company. However, it may be noted that the trading window for dealing in securities is already under closure from 15th July 2023 till 48 hours after the financial results for the quarter ended June 30, 2023 are filed with stock exchanges,” said IOC in the exchange filing.
Also Read: Explained | What does Saudi’s oil output cut mean for India?
Oil marketing companies had suffered significant losses in the first half of fiscal 2022-23 on high crude oil prices as a result of the Russia-Ukraine war. OMCs did not significantly increase retail prices last year even after crude reached a peak of $140 per barrel in March 2022. Due to this, the oil refiners registered losses as petrol and diesel rates have been unchanged since April 2022.
However, Indian Oil posted a turnaround performance in the last quarter of the financial year when they saw combined profits of nearly ₹20,000 crore. The profits came on the back of lower crude oil prices in 2023 and improved margins.
Crude oil prices posted their fourth consecutive quarter of losses amid worries of sluggish global economic activity. However, the world’s top oil exporter Saudi Arabia has now announced further output cuts that will be implemented from August, which could push up crude prices amid a tighter supply in market.
Recently, Bharat Petroleum Corporation Ltd (BPCL) also approved a fund raise worth ₹18,000 crore through a rights issue to fund their energy security plans. Brokerage firm Citi in its note mentioned that after BPCL’s announcement, it expects Indian Oil to follow suit and announce a rights issue of its own.
OMCs have also seen a sharp surge in share prices over the last few months as their financial health improves. Shares of Indian Oil have risen over 22 per cent each on a year-to-date basis, while those of BPCL are up 12.5 per cent.
Shares of state-owned oil refiners – BPCL, IOC, HPCL are trading with gains between 4-6 per cent coming on heavy volumes, starting the week on a strong note. On July 4, shares of IOC touched a 52-week high of ₹96.41 during the session and settled 0.81 per cent lower at ₹94.61 apiece on the BSE.
Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Download The Mint News App to get Daily Market Updates.
Updated: 04 Jul 2023, 05:44 PM IST