Indian Oil Corporation Ltd planning to acquire 26 per cent stake in Nuclear Power Corporation of India Ltd’s (NPCIL) project

State owned Indian Oil Corporation is mulling the acquisition of a 26 per cent stake in Nuclear Power Corporation of India Ltd’s 1,400 MW atomic power project at Kota. The project will be acquired for an estimated Rs. 900 crore. Nuclear Power Corporation of India is establishing the 1,400 MW power plant scheduled to be completed by the year 2015, latest 2016.

An agreement for the joint venture is expected to be signed in a month. Under the terms of the agreement, Indian Oil Corporation will hold 26 per cent in the project, to be financed by both partners in the debt-equity ratio of 70:30. At the same time, the company is gearing up for its follow-on public offer (FPO) in January, through which it expects to raise about Rs.20, 000 Crore.

The government plans to dilute 10% of its equity holding in IOC through the FPO and an equal stake would be diluted by IOC. Following the stake sale, the government’s holding in IOC would reduce to 64.57 per cent from the existing 78.92 per cent. Indian Oil Corporation has hired six investment banks including Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS-to manage the public offer.

The mega offer is a part of the government’s Rs 40,000 crore disinvestment program this fiscal. Apart from IOC, the government has lined up stake sales in Hindustan Copper, Manganese Ore India Ltd and SAIL, among other PSUs, this fiscal.

Indian Oil Corporation is an Indian state-owned oil and gas company. It is India’s largest commercial enterprise. IndianOil and its subsidiaries account for a 47% share in the petroleum products market, 40% share in refining capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of Companies owns and operates 10 of India’s 19 refineries with a combined refining capacity of 60.2 million metric tons per year.

IndianOil operates the largest and the widest network of fuel stations in the country, numbering about 17606 (15557 regular ROs & 2049 Kissan Sewa Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 47.5 million households through a network of 4,990 Indian distributors.

In addition, IndianOil’s Research and Development Center (R&D) at Faridabad supports, develops and provides the necessary technology solutions to the operating divisions of the corporation and its customers within the country and abroad.

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