Better refining margins and government subsidy helped Indian Oil Corporation (IOC), the country’s biggest oil marketing company, report a more than two-fold jump in net profit for the quarter ended December 31, 2010.
Net profit for the quarter was Rs 1,635 crore, as against Rs 696 crore in the corresponding quarter last year. Net sales for the quarter rose 16 per cent to Rs 75,462 crore. The company received a compensation of Rs 4,442 crore from the government for subsidised sales of fuel. Gross refining margin on every barrel of crude rose to $6.33, up almost 74 per cent from $3.64 in the same quarter of the previous year.
“The higher profit is due to compensation we received from the government,” company chairman S V Narasimhan said.
Its Rs 20,000 crore follow-on public offer (FPO) has been put on hold due to unfavourable market conditions and rising global crude oil prices. “We found in September/October (that) global oil prices (had) started rising and inflation is also high,” Narasimhan said. “I don’t think it is feasible at this stage to think of an FPO.”
The FPO, previously planned for the first quarter of the 2011 calendar year, involved a 10 per cent stake sale by the government and an equal number of new share issues by IOC. It had even appointed six merchant bankers for the sale of 10 per cent equity shares in the FPO. “There is no timeframe (to launch the FPO) at the moment,” he said, adding the company was still awaiting government approval for the share sale.
