Indian Oil Corporation (IOC), the nation's top oil firm, plans to raise Rs 22,000 crore capital through a rights issue of equity shares as part of a government's plan to infuse capital into three state-owned fuel retailers to fund their net zero carbon emission projects.
In a stock exchange filing, IOC said its board has approved "raising of capital by way of issue of equity shares on rights basis up to an amount not exceeding Rs 22,000 crore, subject to receipt of necessary statutory approvals as may be required."
The government, which is the majority owner of the company, is likely to subscribe to the rights issue and infuse equity in the company.
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The board of Bharat Petroleum Corporation Ltd (BPCL) had on June 28 approved raising up to Rs 18,000 crore through a rights issue.
The government had in the annual Budget for 2023-24 (April 2023 to March 2024 fiscal) announced Rs 30,000 crore of capital support to state-run fuel retailers -- BPCL, IOC, and Hindustan Petroleum Corporation Ltd (HPCL) -- to support their energy transition and net zero initiatives.
HPCL, which is majority owned by state-owned Oil and Natural Gas Corporation (ONGC), is likely to make a preferential share allotment to the government to get the capital.
IOC had last month doubled its authorised share capital to Rs 30,000 crore.
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The company also said its board approved "formation of a joint venture company for battery swapping business in India as a private limited company with 50:50 collaboration between IndianOil and Sun Mobility Pte Ltd Singapore (SMS)."
IOC said its equity investment would be Rs 1,800 crore till financial year 2026-27.
"The Board has also accorded approval for investment of USD 78.31 million in IOCL Singapore Pte Ltd, Singapore (a wholly owned subsidiary of IndianOil) for acquisition of preference shares and warrants of SMS," it said. "These investments are subject to receipt of necessary statutory/ regulatory approvals."
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