MOSCOW (MRC) -- Indian Oil Corp. Ltd (IOC) plans to start its Paradip refinery in Odisha by October and increase its capacity utilization to 80% before the end of fiscal year 2017, the company said during a conference call with analysts, said Livemint.
The call was organized to inform analysts on the proposed 10% divestment of the company, scheduled for Monday, and its future plans. The share sale may fetch the government almost Rs.9,890 crore, based on a 15-day average price of the stock at Rs.407.35. The floor price for the share sale will be announced on 22 August. The government currently holds 68.57% in the company.
The company informed analysts that it has earmarked an investment of close to Rs.15,000 crore for the current fiscal year. These will be largely put into augmenting the capacity of its existing pipelines, setting up a new pipeline, a petrochemical plant at Paradip and a liquefied natural gas (LNG) regasification terminal at Ennore in Tamil Nadu.
A major part of the capital expansion will go into its pipelines projects, which comprises the Rs.2,321-crore Paradip-Hyderabad pipeline; Rs.1,823 crore will be invested for augmenting the capacity of the Paradip-Haldia-Durgapur LPG pipeline, and Rs.887 crore for the Jaipur-Panipat naphtha pipeline. Another mega investment will be for the proposed Rs.3,150-crore polypropylene project at its yet-to-be-commissioned Paradip refinery.
The management told analysts that all the projects have been planned with a minimum internal rate of return (IRR) of 13%. Analysts have earlier said that the company’s much-delayed Paradip refinery will continue to be a drag on the firm’s profits in the initial years although it will increase its revenues substantially.
As MRC informed earlier, Indian Oil Corp. is seeking to build a USD3 billion petrochemicals plant in Iran. The plan hinges on assurances from Iran that the 1 million-ton-a-year project will have access to cheap natural gas as feedstock.
Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
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