Indian Oil Corporation Ltd (IOC) has announced its plan to consider raising funds through a rights issue of equity shares to support its capital expenditure projects. The decision will be discussed at the board meeting scheduled for July 7 and is subject to necessary statutory approvals.
IOC stated that the announcement constitutes unpublished price-sensitive information, requiring the closure of the trading window for insiders of the company. Oil marketing companies (OMCs) faced significant losses in the first half of the fiscal year 2022-23 due to high crude oil prices resulting from the Russia-Ukraine war.
Indian Oil reported a turnaround in the last quarter of the financial year, with combined profits of nearly Rs 20,000 crore attributed to lower crude oil prices and improved margins. Crude oil prices have experienced four consecutive quarters of losses, but Saudi Arabia’s announcement of further output cuts may lead to higher crude prices due to tighter supply.
Bharat Petroleum Corporation Ltd (BPCL) recently approved an Rs 18,000 crore fundraise through a rights issue, prompting expectations for Indian Oil to follow suit.
OMCs have witnessed a surge in share prices as their financial health improves, with Indian Oil’s shares rising over 22% year-to-date. On July 4, IOC shares reached a 52-week high of Rs 96.41 during the session, closing at Rs 94.61 apiece on the BSE.
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