Indian Oil may form subsidiary for retail assets to unlock value

Indian Oil Corp could create a subsidiary for its retail belongings to enable unlock benefit, the head of finance at India’s biggest refiner stated on Tuesday, a working day following the federal government declared programs to monetise IOC’s pipeline belongings.

“Presently it is not on our radar but a risk of any such detail to unlock the benefit cannot be ruled out,” Sandeep Kumar Gupta stated on an analysts contact when questioned if IOC programs to hive off its fuel retailing small business into a independent enterprise.

Finance Minister Nirmala Sitharaman in her funds for fiscal 12 months from April, declared program to monetise oil and gas pipeline belongings of IOC, gas utility GAIL (India) Ltd and Hindustan Petroleum Company Ltd.

Shares of IOC fell 27.six% in 2020, even though the broader Nifty fifty index attained 14.9%.

IOC operates a pipeline community of 14,600 kilometres with a capacity to transport 94.42 million tonnes for every annum of crude and fuels and 21.69 million cubic metres for every working day of gas.

The enterprise has not however decided on how to monetise its pipeline belongings, Gupta stated, incorporating IOC would hold manage of them as they are crucial for its functions and hyperlink ports and fuel storage depots with refineries.

“A person model could be InvIt (infrastructure expenditure trusts) and it is not important we do one hundred% stake sale of our (pipeline) belongings jointly,” he stated.

IOC may well initially provide stakes in one or two pipelines, he stated.

The enterprise would use proceeds of the stake sale on new jobs such as petrochemicals, renewable energy and hydrogen generation.

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