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New Delhi: The Indian Oil Corporation (IOC) has retracted its proposed rights issue, which aimed to raise Rs 22,000 crore. Initially, the company had received approval to increase capital by issuing equity shares on a rights basis, pending regulatory consent, as announced in a notification on July 7, 2023.
However, during a board meeting on September 30, 2024, the IOC resolved to cancel the rights issue after being informed by the Ministry of Petroleum & Natural Gas (MoP&NG) that the 2024-25 budget did not allocate funds for capital support to Oil Marketing Companies (OMCs).
In a communication to the stock exchange, IOC stated, “Following our prior communication dated 07.07.2023, the Board had approved the capital raise through a rights issue of equity shares, not exceeding Rs. 22,000 crore, subject to necessary regulatory approvals.”
The government’s decision to abstain from the rights issue came after the proposed Rs 30,000 crore allocation was omitted from the final budget.
The company further informed, “The MoP&NG has indicated that the budget for 2024-25 does not allocate capital support to OMCs, contrary to the previously proposed Rs. 30,000 crore. Consequently, given the Government of India’s (the promoter’s) decision not to partake in the rights issue, the Board, in its meeting on 30.09.2024, has decided to withdraw the planned rights issue of equity shares.”
The board meeting, which lasted from 11:30 am to 2:30 pm, finalized the withdrawal of the capital-raising plan. At 3:10 pm, IOC’s shares were trading at Rs 180.30, up by 0.22%.
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