IOC to raise Rs 500 crore from Bank of America for expansion

Nisha Das
10 November 2003

"We have a repayment coming up. Once we are through with it, we will raise this amount from Bank of America," the official says. "The money will be used for refinery expansion as well as other related projects."

IOC is in talks with various international banks to mobilise required funds for its expansion activities. "As the debt equity ratio of IOC has come down from the earlier 1.03 per cent to 0.47 per cent, fund mobilisation from the international market is not a difficult task now. Besides, the international agencies are offering cheap rates," he adds.

IOC director (marketing) N G Kannan says the corporation has outlined a Rs 2,400-crore capital outlay plan to overhaul its marketing operations. "We will set up 1,000 retail outlets by the end of the fiscal to saturate the market and dissuade other players from entering it."

He adds: "We set up about 552 retail outlets by this October and will go for another 500 outlets by the end of this fiscal. Out of the Rs 2, 400 crore for the current fiscal, Rs 650 crore will be spent on LPG, Rs 1,400 crore on general sales, Rs 250 crore on strengthening the infrastructure and Rs 100 crore on others."

The 1,000 outlets, which will be set up at a cost of Rs 600 crore will be the ''brand ambassadors'' of the company and these outlets will be called Indian Oil Xtra outlets, he says. "IOC is gearing up for competition, which will come after the total deregulation of the oil sector. The retail outlets will include the 125 flagship highway retail outlets, which will be spread across 2.7 acres, each offering various facilities."

According to Kannan, the company plans to sell about 2,000 to 3,000 kilo litres of fuel at these outlets, which will be set up mostly along the new highways coming up under the Golden Quadrilateral highway project.