Key Points:
- Bharat Petroleum Corporation Ltd (BPCL) plans to raise up to Rs 18,000 crore through a rights issue of equity shares.
- The funds raised will be used to support BPCL’s net zero carbon emission projects.
- The government, as the majority owner of BPCL, is expected to subscribe to the rights issue and provide equity infusion.
- This move aligns with the government’s Budget announcement to provide Rs 35,000 crore of capital support to state-run fuel retailers for their energy transition and net zero initiatives.
State-owned Bharat Petroleum Corporation Ltd (BPCL) has announced its intention to raise up to Rs 18,000 crore through a rights issue of equity shares to fund its net zero carbon emission projects. The government, being the majority owner of the company, is expected to subscribe to the rights issue and infuse equity into BPCL. This move aligns with the government’s Budget announcement to provide Rs 35,000 crore of capital support to state-run fuel retailers, including BPCL, Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation Ltd (HPCL), to aid their energy transition and net zero initiatives.
During a board meeting held on Wednesday, BPCL approved the proposal for capital raising, stipulating that the funds would be raised by issuing equity shares on a rights basis to eligible equity shareholders as on the record date. The company intends to disclose the detailed terms of the rights issue, such as the issue price, right entitlement, record date, timing, and payment terms, separately after obtaining board approval.
In a similar vein, IOC, which is also planning a rights issue, had previously approved the doubling of its authorized share capital to Rs 30,000 crore on Saturday. Meanwhile, HPCL, majority-owned by state-owned Oil and Natural Gas Corporation (ONGC), is expected to undertake a preferential share allotment to the government to secure capital infusion. The government, however, is yet to announce the distribution of the Rs 35,000 crore among the three fuel retailers.
BPCL’s decision to raise significant funds through a rights issue demonstrates its commitment to tackling carbon emissions and driving the transition towards a greener future. By accessing capital for net zero projects, BPCL aims to enhance its sustainability initiatives while contributing to the government’s broader energy transition goals.
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