New Delhi — The Indian government this week kicked off a multi-billion-dollar process seeking equity in its three big state refiners in return for funding towards the firms’ energy transition projects, three sources familiar with the matter told Reuters.
The Oil Ministry on Wednesday asked state-controlled Indian Oil Corp and Bharat Petroleum Corp Ltd (BPCL) to launch rights issues, and asked Hindustan Petroleum Corp Ltd (HPCL) to make a preferential share allotment to the government, the people said.
Indian Oil, HPCL, BPCL and the oil ministry did not immediately respond to requests for comment.
In the 2023/24 federal budget unveiled in February, Finance Minister Nirmala Sitharaman announced that the government would provide 300 billion rupees ($3.66 billion) in equity to help state oil refiners move towards cleaner energy.
Combined, the three refiners aim to invest 3.5-4 trillion rupees to reach their net zero-emissions goals by 2040, the sources said this week.
Indian Oil, the country’s top refiner, will soon seek board approval to raise its authorised share capital ahead of the planned rights issue, two sources said.
The government’s seeking of a preferential allotment of shares from HPCL follows the 2018 sale of the government’s 51.1% stake to state-run Oil and Natural Gas Corp.
The federal government wants to complete the process by all three refiners by October, the sources said, adding that the timing will also depend on market conditions.
In addition to share issues, the three companies also plan to raise debt to meet their 2040 commitments, one of the sources said.
Follow us on twitter
