homebusiness Newscompanies NewsCentre working on Cabinet approval for capital infusion in oil marketing companies
Centre working on Cabinet approval for capital infusion in oil marketing companies
The government is committed to investing Rs 30,000 crore for capex in OMCs.
The government is working on a Cabinet nod for capital infusion in oil marketing companies (OMCs), government sources told CNBC-TV18. As per them, the government is committed to investing Rs 30,000 crore for capex in OMCs. The infusion for capex is viable via the rights issue. Any unsubscribed portion of the rights issue shall be picked up by the government.
The management of other OMCs shall also take a call on this. Bharat Petroleum Corporation Ltd (BPCL) rights issue for capex is being “over analysed”, the sources said.
BPCL board met on June 28 to approve the proposal for raising up to Rs 18,000 crore. The capital will be raised by way of the issue of equity shares on a rights issue basis to eligible equity shareholders of the corporation as on the record date, which will be notified subsequently, the company said in a filing to BSE.
Just after BPCL, Indian Oil Corporation (IOC) also announced a rights issue. "...it is hereby informed that a board meeting of the company is scheduled on Friday, July 7, 2023, to consider raising capital through the Right Issue of equity shares to meet the capital expenditure plan for its various projects, subject to various statutory approvals as may be required," IOC said in an exchange filing on July 4.
There was a Budget announcement of Rs 30,000 crore in priority capital investments for OMCs.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL)-the three companies meet over 90 percent of India's petroleum demand. However, they are facing financial strain. In the first half of the last financial year, these companies booked a cumulative loss of over Rs 25,000 crore owing to selling liquified petroleum gas (LPG) and other cooking gases below the cost price.
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