Business

HPCL plans ₹61,000 cr. capex

Boosting capacity: HPCL’s Vizag renery will be expanded
along with the new renery in Rajasthan.

Boosting capacity: HPCL’s Vizag renery will be expanded along with the new renery in Rajasthan.   | Photo Credit: K_R_DEEPAK

more-in

Capacity expansion on anvil; in merger with ONGC, explorer may also get MRPL

Hindustan Petroleum Corporation (HPCL) is planning invest as much as ₹61,000 crore over the next five years to augment its refining and marketing capacity to become India’s second-largest state-owned refiner after Indian Oil Corporation.

Of the ₹61,000 crore, the company intends to invest ₹7,110 crore this year alone or 21% more than capex of ₹5,860 crore in the last fiscal.

‘Rising energy demand’

HPCL chairman, M.K. Surana said, “With a huge potential for growth amid rising energy demand and due to low per capita consumption base, the oil and gas sector is poised for an exciting and challenging future.

We are adapting to this changing energy mix and are well positioned to create value for all stakeholders in the future with a capex of over ₹61,000 crore over the next five years.”

The government has approved HPCL’s merger with ONGC with the latter buying out the government’s 51.11% stake in HPCL.

Talking about the merger, Mr. Surana said, “The government has formed an advisory panel which would decide the valuation (share price) for the acquisition.”

Post merger, HPCL will become a subsidiary of ONGC and will remain a listed company with its brand identity and HPCL’s board will continue to remain in place.

MRPL’s fate

Asked about MRPL, in which both HPCL and ONGC have a stake, Mr. Surana said, “Discussion on the issue has not taken place yet but it is a reasonable possibility that MRPL will go along with HPCL.”

ONGC holds about 72% stake in MRPL, HPCL has 17% stake and the rest is held by the public.

HPCL’s existing refineries, in Mumbai with capacity of 7.5 mmtpa and Visakhapatnam with a capacity of 8.3 mmpta, are expected to be expanded along with the investment in the new 9 mmtpa greenfield refinery in Rajasthan.

HPCL also operates a refinery in Punjab through a joint venture with Mittal Investments.

With the MRPL refinery and the planned expansion of capacity, HPCL’s total refining capacity is expected to go beyond 50 mmtpa, making it the largest, state-owned refiner after Indian Oil Corporation.

HPCL is expected to invest more than ₹43,000 crore in the refinery-cum-petrochemicals project in Barmer, Rajasthan.

HPCL shares closed down 1.4% at ₹452 in a flat Mumbai market on Friday. The announcement came after closure of market hours on Friday.

Why you should pay for quality journalism - Click to know more

Related Topics Industry Business
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jan 26, 2020 8:34:43 AM | https://www.thehindu.com/business/hpcl-plans-61000-cr-capex/article19699843.ece

Next Story