Shares of the state-run petrochemical company Indian Oil Corporation hit a 52-week high on Wednesday as the company plans to invest Rs 32,000 crore over next four years to expand its output. The stock of the largest public sector company Indian Oil Corporation rose as much as 3.63% to the 52-week high of Rs 450.4 on BSE. To meet the rising demand for petrochemicals, especially plastics and polymers, largest public sector company Indian Oil Corporation will invest Rs 32,000 crore to ramp up its output by fiscal 2021.
Huge capex in row
This investment is part of the overall Rs 1.8 trillion capex planned for the next five to seven years, PTI reported citing IOC chairman Sanjiv Singh. The petrochemical business contributes a quarter of the most profitable PSU’s profit, which rose to the highest at Rs 19,106 crore in fiscal 2017. Earlier on 3 August 2017, Indian Oil Corporation shares gained over 6% which was the biggest intraday gain since 25 January 2017 after the petrochemical company reported a 19.44% rise in the total income. Indian Oil has already executed petchem projects worth Rs 20,800 crore and is close to commission a Rs 3,150-crore polypropylene plant at its 15-million tonne refinery at Paradip in Odisha.
IOC chairman Sanjiv Singh said the company reported its highest profit at Rs 19,106 crore in fiscal 2017 on the back of best ever sales, refinery production and became the most profitable PSU. During the year, company’s sales rose to Rs 4,38,710 crore. On the overall capex plan, he said, the PSU has lined up a capex of Rs 1.8 trillion over the next five to seven years. “This capex is to scale up our investments in areas to ensure that IOC grows profitably in terms of volumes and revenue. This will see an investment of around Rs 30,000 crore per annum in asset creation such as the expansion of the Gujarat, Barauni, Panipat and Paradip refineries. On the gas pipelines, he said, IOC will have over 20,000-km of natural gas and liquid fuel pipes by fiscal 2021. Currently, the oil and gas major has 13,000-km of the 15,000-km operational pipelines, making it the largest player in the country.
On the world’s largest refinery being planned in Ratnagiri district of Maharashtra, land acquisition and other related work is underway and an optimal product plan will be worked out shortly. The proposed 60 million tonne per annum mega refinery with an investment of Rs 2.7 trillion will have IOC holding 50 per cent in the JV company formed in June while the rest of the equity will be equally held by the other two state-run refiners HPCL and BPCL. This refinery is part of government plans to almost double the national refining capacity to 450 MT (million tonne) from 230 MT now.