BPCL Board Approves Rs 18,000 Crore Rights Issue to Raise Funds

30 Jun 2023 , 11:29 AM

The board of directors of Bharat Petroleum Corporation Ltd (BPCL) has given its nod for a rights issue, aiming to raise up to Rs 18,000 crore.

BPCL, a Maharatna company and a public sector undertaking (PSU), disclosed this information to the Indian stock market exchanges, stating that the rights issue price, record date, and other details will be announced soon.

In its official communication to the stock market bourses, BPCL stated, ‘The Board, at the meeting held on 28.6.2023, has approved the proposal for raising capital up to Rs 18,000 crore (Rupees Eighteen Thousand crores only) through the issuance of equity shares on a rights issue basis to eligible equity shareholders of the Corporation.’

The company further mentioned that the rights issue terms, including the issue price, right entitlement, record date, timing, and terms of payment, will be shared separately after board approval in due course. The decision to launch the BPCL rights issue comes as part of the central government’s initiative to infuse more equity into the state-owned oil manufacturing company.

In the 2023 budget, Finance Minister Nirmala Sitharaman had announced a capital support of Rs 35,000 crore for oil PSU companies, including HPCL (Hindustan Petroleum Corporation Ltd), BPCL, and Indian Oil Corporation Ltd (IOCL). As a result, the stock market is anticipating rights issues from IOCL and HPCL as well.

As per sources, IOCL has recently revealed its plan to double its authorized share capital, stating that the Board of Indian Oil approved a proposal to seek approval from members at the upcoming Annual General Meeting for increasing the Authorized Share Capital of the company from Rs 15,000 crore to Rs 30,000 crore. This move indicates the overall trend of PSU oil companies seeking to strengthen their financial position through capital infusion and rights issues.

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