GAIL (India) on Monday reported a 35 per cent jump in net profit in the first quarter ended June 30, 2010, despite a near five-fold jump in fuel subsidy outgo. The company said that it would raise Rs. 500 crore through a maiden bonds issue in January next. Net profit rose 35.2 per cent to Rs. 886.80 crore in the April-June quarter from Rs. 655.80 crore in the same period a year-ago, GAIL Chairman and Managing Director B. C. Tripathi told reporters here.
The company's turnover rose to Rs. 7,163.50 crore from Rs. 6,119 crore. The increase was due to the government's move to more than double the APM gas price to $4.2 per mBtu (million British thermal unit) from $1.79 per mBtu and allow GAIL to charge a marketing margin of Rs. 200 per thousand cubic metres. The jump in net income was despite GAIL having to dole out Rs. 445 crore towards subsidies on petrol, diesel, domestic LPG and kerosene as against Rs. 75 crore.
Mr. Tripathi said the GAIL board on Monday approved borrowing of Rs. 1,250 crore from HDFC and raising another $150 million through the external commercial borrowing (ECB) route in December this year. The ECB would be the first tranche of $500 million the company planned to raise for funding its pipeline and expansion of its petrochemical project, he said. Mr. Tripathi said the company was doubling capacity of its petrochemical plant at Pata in Uttar Pradesh to 9 lakh tonnes at an investment of Rs. 8,200 crore.
JV with RIL put on back-burner
The company has put on the back-burner plans to set up a mega petrochemical plant overseas in a joint venture with Reliance Industries and has instead decided to invest Rs. 8,200 crore on doubling the capacity of its chemical unit in Uttar Pradesh. The expansion will take 42 months to complete, but GAIL would endeavour to commission the unit in 36 months, he said.
RIL and GAIL had on December 4, 2007, signed a memorandum of understanding (MoU) to jointly set up a mega gas-based petrochemical plant.