India Mulls ONGC Rights Issue to Fund Green Initiatives at HPCL, Aiming for $1.9 Billion Boost

23 Nov 2023 , 03:12 PM

India is considering asking Oil and Natural Gas Corp (ONGC) to launch a rights issue to fund green projects at Hindustan Petroleum Corp (HPCL). The move is part of the government’s plan to provide equity of 300 billion rupees ($3.6 billion) to state oil refiners for cleaner energy initiatives.

Options for HPCL include a direct loan from the government at preferential rates, and the oil ministry is awaiting a response from the finance ministry on the ONGC rights issue plan. The government’s 2018 sale of its entire stake in HPCL to ONGC made it a subsidiary, and ONGC holds a 58.93% stake in the company.

State refiners Indian Oil Corp and Bharat Petroleum Corp have also announced plans for rights issues of 220 billion and 180 billion rupees, respectively. The lack of clarity on how to infuse funds into HPCL has delayed the launch of rights issues for IOC and BPCL.

The combined investment goal for the three refiners is 3.5 trillion to 4 trillion rupees to achieve net-zero emissions by 2040.

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