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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (6468)	9/7/1999 10:37:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Indian Oil divestment likely next year indianoilcorp.com Source : MI Sep 7, 1999, 9:19:09 AM The Government's divestment programme for Indian Oil Corporation is expected to be kicked off in January 2000 though a simultaneous issue of GDRs and a domestic offering. M A Pathan, chairman cum managing director of IOC, said that although the final decision has to be taken by the take force, the company is hoping that the issue would hit the market by January. Preparations for the issue are already under way. The government is planning to divest around 10 per cent of government equity, which would translate to around 38.9 million shares. However, the government would have to decide as to whether it would take into account the bonus issue as well. The company has declared as bonus of 1:1. The ratio for the domestic issue would only be decided at a later stage, although the price for the domestic institutional buyers would be benchmarked by the international price of the issue. The small retail investors would, however, be provided a small discount. The issue is expected to fetch Rs 1,200 to Rs 1,500 crore (US$266-$333 million) for the Central exchequer. The company is targeting a turnover of about Rs 77,000 crore (US$17.1 billion) by the end of the ongoing fiscal with a profit of about Rs 2,500 crore (US$556 million). IOC registered a growth of about 30 per cent in its profit in 1998-99 with a profit of about Rs 2,214 crore. Elaborating on the recent trends in the international prices Mr Pathan said that the bottom lines of refinery companies were hit significantly due to the suppressed product prices. Now, with prices of petro products too on a high in tandem with prices of crude, refinery margins should improve. However, IOC has an outstanding of about Rs 1,000 crore from OCC on account of cost upgradation and payment towards market compensation. Commenting on the oil import bill, which is expected to rise to around $9 billion by the end of this fiscal following the rise in international prices, Mr Pathan said, "IOC is fully aware of the international trends and is geared in all respects both financially and with infrastructure to meet the additional requirements." With the commissioning of the Panipat refinery by IOC and Reliance's Jamnagar refinery, the requirement for crude vis-…-vis petro products has increased significantly. By the end of this fiscal, the country should have a total refining capacity of around 100 million tonnes. The company had also decided to expand its Panipat refinery by another 6 million tonnes to 12 million tonnes.