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Pratim Ranjan Bose

Final call likely by September

Kolkata , Aug. 3

IndianOil will take a final call on the proposal to tap the bond market for raising finances, latest by September. The decision, however, will depend on the liquidity status of the first phase of oil bonds due to be issued by the Centre shortly.

"We will decide on tapping the bond market depending on the tenure and eligibility status of the oil bonds," a company official said.

"If the oil bonds are of r three to five year tenure, carry SLR status and be an eligible security for investment by provident fund authorities, they can be adequately leveraged to meet the immediate requirement of finances," he added.

The last issue of (interest bearing) bonds were of three to nine year tenure.

The bonds were also not awarded any special investment status. So,of the Rs 6,500-crore bonds received by IOC last year, the Rs 43000-crore 6- and 9-year bonds witnessed very little demand. In fact, 9-year bonds did not find any takers.

The repeated rise in repo rates, however, ensures that the returns on bonds will increase. IOC expects a share of roughly Rs 3,700 crore of oil bonds in the first quarter, Rs 14,800 crore for 2006-07.

Under-recovery

Talking on the recent crude price rise and the negative impact on the company, sources said that IOC would take a view on the under-recoveries over and above the promised compensation package by the end of this month.

"Crude prices ruled well above $ 70 during July. We will take a view on the under-recoveries if the trend continues in August," the official said.

More Stories on : Govt Bonds | Petroleum

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