1. ICICI Bank, SBI, Axis Bank gain after Essar Oil deal with Rosneft-led consortium

ICICI Bank, SBI, Axis Bank gain after Essar Oil deal with Rosneft-led consortium

Shares of ICICI Bank, Axis Bank and State Bank of India gained between 1 per cent and 7 per cent after debt-laden Essar Group confirmed it has agreed to sell an oil unit to a consortium led by Russia's Rosneft.

By: | New Delhi | Updated: October 17, 2016 12:12 PM
BSE Sensex, NSE Nifty Shares of ICICI Bank, Axis Bank and State Bank of India gained between 1 per cent and 7 per cent after debt-laden Essar Group confirmed it has agreed to sell an oil unit to a consortium led by Russia’s Rosneft. (Photo: PTI)

Shares of ICICI Bank, Axis Bank and State Bank of India gained between 1 per cent and 7 per cent after debt-laden Essar Group confirmed it has agreed to sell an oil unit to a consortium led by Russia’s Rosneft. Essar has plans to use proceeds from the sale to offset some 50 per cent of the debt on its group companies. Cheering the news, shares of private sector lender Axis Bank and ICICI Bank surged as much as 2.54 per cent and 7.31 per cent, respectively. Public sector lender State Bank of India gained as much as 1.75 per cent.

According to Nomura, such a large deleveraging would be positive for Essar Group lenders. Banks with highest loan exposure to Essar Group are ICICI Bank, Axis Bank, Punjab National Bank (PNB) and SBI. Shares of Punjab National Bank were trading 0.07 per cent up at Rs 139.10 at 11.50 am.

Essar Group CEO says parent company’s debt would be cut by about $5 billion and a further $5 billion would go towards trimming debt at the operating company level.

The all-cash deal will give Rosneft and its partners control of Essar’s 20 million tonne refinery in Gujarat, and its retail fuel outlets in India, where growth for refined petroleum goods in the next five years is expected to be in the 5 per cent to 7 per cent range.

At 11.56 am, shares of ICICI Bank, Axis Bank and SBI were trading up by 6.43 per cent, 0.84 per cent and 0.56 per cent.

(With agency inputs)

Please Wait while comments are loading...

Go to Top