New Delhi, September 30
Indian Oil Corporation Limited (IOCL), has decided to withdraw its previously proposed rights issue of equity shares amounting to Rs 22,000 crore.
According to an exchange filing, the decision was made during the company's Board meeting held on Monday, September 30th, following the government's decision not to allocate funds for capital support to oil marketing companies (OMCs) in the Union Budget for 2024-25.
This move marks a reversal from the company's earlier announcement on July 7, 2023, where the Board had approved plans to raise capital through a rights issue, subject to necessary statutory approvals.
The proposed allocation of Rs 30,000 crore for capital support to OMCs, anticipated in the Union Budget, did not materialise, with the Ministry of Petroleum and Natural Gas (MoP&NG) confirming that no funds had been earmarked for the purpose.
In light of the government's non-participation, IOCL's Board decided to withdraw the rights issue during the meeting. The company secretary, Kamal Kumar Gwalani, confirmed the withdrawal in a regulatory filing, stating, "In view of the Govt. of India's (Promoters) non-participation in the Rights Issue, the Board has decided to withdraw the proposed issue of equity shares."
IOCL had initially planned to raise the funds to support its capital expenditure and expansion projects. However, the government's decision has impacted these plans, and the company is now reassessing its capital-raising strategy.
The board meeting also comes in the context of IOCL's other business moves, including the formation of a joint venture with Sun Mobility Pte. Ltd. for battery-swapping services in India.
The company's ambitious investment plan includes a Rs 1,800 crore infusion into this venture by FY2026-27, alongside other international investments.