|IOC chairman RS Butola|
STATE-owned Indian Oil Corporation’s (IOC) net profit in the second quarter of the current fiscal (July-Sept) fell 82.47 percent to Rs 1,684 crore from Rs 9,611 crore during the same quarter in the previous year. The PSU’s income from operations grew by 4.1 percent to Rs 1,10,390 crore during July-September of 2013 from Rs 1,06,001 crore during the same period last year.
“The decrease in profit is mainly on account of...exchange loss of Rs 2,158 crore in the quarter against an exchange gain of Rs 2,289 crore in the corresponding quarter of the previous year,” RS Butola, chairman, Indian Oil, said in a statement.
This dip is also due to net under realization of Rs 413 crore in current quarter as compared to over recovery of Rs 3,850 crore received during same period previous year, the statement added.
In line with the scheme formulated by Petroleum Planning and Analysis Cell (PPAC), the PSU has received during April-September 2013 discounts of Rs 16785.91 crore compared to Rs 16185.91 crore during the like period last year on crude oil and products purchased from ONGC, OIL, GAIL and CPCL towards part of the under recovery suffered on sale of regulated products like LPG.
Meanwhile, the oil marketing company is opposed to government’s move to divest stake in the company as the firm feels the share prices are “unduly depressed” which may be a cause of concern for the investors. The government plans to sell a 10-percent stake in IOC, with road shows beginning from Tuesday.
The PSU’s shares have recently seen a surge of Rs 15-20 per share. This follows the recommendations of the Kirit Parikh committee on fuel pricing that proposes a hike of Rs 5 per litre in diesel prices and Rs 250 per cylinder in LPG.
The department of divestment had earlier postponed the stake sale of IOC in October following opposition by the oil ministry. The ministry thought the market conditions were not conducive for disinvestment. Currently, the government holds a 78.92-percent stake in the oil major. Five merchant bankers — Citibank, HSBC, UBS Securities, SBI Capital and JM Financial — have been appointed to look after the stake sale.
The government has so far raised Rs 1,325 crore from divestments in MMTC, Hindustan Copper, National Fertiliser, ITDC, State Trading Corporation and Neyveli Lignite. Power Grid, NHPC and Engineers India have also been lined up for divestment in 2013-14.
However, the stake sales in Coal India and IOC are crucial for the government to meet the divestment target of Rs 55,814 crore for 2013-14.