Government may half its proposed Rs 30,000 crore equity to Oil major PSUs

The aid for the same initiation has been provided by government's previous year budget to help companies reach the goals, by inflowing Rs300 crore in equity support.

Government may half its proposed Rs 30,000 crore equity to Oil major PSUs

The Indian government is all set to cut down the equity investment to $1.8 billion in the ongoing fiscal year to help state oil refiners to achieve their respective milestones of green energy, eco-friendly projects. The country is considered to be Asia's third-largest economy, which is facing shortage of 40 percent in collecting revenues from stake sales in state-run companies, and is purposely prioritising to spend less to limit its fiscal deficit to 5.9 percent of GDP for this fiscal year. State-owned Bharat petroleum and Hindustan Petroleum corporation has aimed to end net carbon emissions from their operations by 2040, and Indian oil corporation has set a target for 2046.

The aid for the same initiation has been provided by government's previous year budget to help companies reach the goals, by inflowing Rs300 crore in equity support.

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The good capital market growth of the companies till date has made realise the government to provide funds gradually in different installment amounts and for that only Rs150 crore equity support will be furnished in this fiscal year. As per sources, ONGC, the parent firm of HPCL, will upgrade the government's stake in it by 1%-1.5% through the preferential issue of shares.

The government had announced its capital support plans for these state owned companies in last fiscal year's budget. These companies that time were facing an unsound financial patch and were demanding compensation for the heavy losses they had suffered in the first two quarters of 2022-23 for not increasing retail fuel prices in line with international rates.

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After the first half of FY24, the state refineries posted record-high profits, triggering the government to reconsider its investment plans and prompted to cut down halve of the Rs 30,000 crore investment. It was mainly organised to used by the companies for their green transition projects. While the companies are not fully interested for equity infusions, instead favoured to raise long-term debt from the market at an acceptable rate and fund their green projects.

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