BPCL Will Issue Rights to Raise Rs 18,000 Cr

State-owned Bharat Petroleum Corporation Ltd (BPCL) said on Wednesday that it would sell equity shares on a rights basis to generate up to Rs 18,000 crore to support its net zero carbon emission projects.

The government, which owns the corporation in its entirety, is most likely to participate in the rights offer and inject equity into the business. According to the Budget declaration, this would provide state-run fuel retailers BPCL, Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation Ltd (HPCL) financial assistance around Rs 35,000 crore to help them with their net zero and energy transformation programmes.

IOC and HPCL are expected to devise similar plans to get funding from the government.

According to a stock market statement by BPCL, its board “approved the proposal for raising capital up to an amount not exceeding Rs 18,000 crore” at a meeting held on Wednesday. This capital will be obtained by the rights-based issuance of equity shares to the corporation’s eligible equity shareholders as of the record date.

It also said that following the board’s approval in due course, specific information about the rights issue, such as the issue price, right entitlement, record date, timing, and conditions of payment, will be provided separately.

IOC authorised raising its permitted share capital to Rs 30,000 crore on Saturday. The company is also preparing to undertake a rights issue.

In order to get the cash injection, HPCL, which is majority held by the government-controlled Oil and Natural Gas Corporation (ONGC), is probably going to issue preferred shares to the government.

The government has not yet disclosed how the three gasoline sellers would split the Rs 35,000 crore.