Indian Oil Corp (IOC), the nation’s largest oil firm, will next week consider issuing bonus shares to its shareholders to capitalise part of the reserve.The board of IOC will meet on August 29, “to consider issue of bonus shares,” the company said in a regulatory filing.
IOC will be the second state-owned oil company after Hindustan Petroleum Corp Ltd. (HPCL) to consider issuing bonus shares following a government directive. HPCL board had last month approved issuing two bonus shares of Rs 10 each for every existing one. This helped capitalise reserves to the extent of Rs 677.25 crore.
The government had written to all profit-making public sector units to consider buying back shares or issuing bonus shares to put their surplus cash to use and giving their owner, the government, more value.
IOC is India’s largest commercial enterprise, with a sales turnover of Rs 3,99,601 crore ($61 billion) and profits of Rs 10,399 crore ($1.58 billion) for the year 2015-16. It is ranked 161st among the world’s largest corporates (and first among Indian companies) in the prestigious Fortune ‘Global 500’ listing for the year 2016.
The government owns 58.28 percent stake in IOC, which controls nearly half of India’s fuel market, 35 percent national oil refining capacity and 71 percent of downstream sector pipelines.
IOC owns and operates 11 of India’s 23 refineries with a combined refining capacity of 80.7 million tonnes per annum as well as a pipeline network spanning about 11,750-km.
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