IndianOil set to raise capex by 80% to Rs 8,500 cr
New Delhi   03-Feb-2008
<b>Investments to go up to Rs 10,000 cr in 2009-10</b> IndianOil is set to increase its capital expenditure by almost 80 per cent to Rs 8,500 crore in 2008-09. The investments will increase further to Rs 10,000 crore in 2009-10. The company's capex for the current fiscal was Rs 4,500 crore. The projected investments, however, does not include acquisition opportunities pursued by the company in both upstream and downstream sectors. The proposed investments in a 15-million-tonne refinery in Turkey will be made through a SPV and is kept out of the capex budget. Apart from the ongoing major projects at Panipat and Koyali, IndianOil will start commissioning of its 15 mt Para-dip refinery-cum-petrochemicals project in 2008-09. This apart, projects-" is lined up for up gradation or modernisation of Mathura, Barauni and Haldia refineries. According to sources, the activities will reach at its peak in 2008-09 and 2009-10 most of the major projects undertaken by the company (including the naphtha cracker at Panipat) will reach its final stages of commissioning. Apart from increasing its refining capacity, IndianOil is making an attempt to increase the use of cheap high sulphur crude and increasing the yield thereby, ensuring higher refining margin. A parallel attempt is made to emerge as a major petrochemical product manufacturer. While the Panipat petrochemical project is in an advanced stage of commissioning, construction of the Paradip refinery-cum-petrochemicals project is expected to begin by April-May. 'Board approval may also be sought to set up paraxylene united 'Haldia. IndianOil has refineries in both Panipat and Haldia. Both the refineries are being expanded. "The petrochemicals projects will allow gainful use of higher quantities of naphtha to be produced by IndianOil refineries in the days ahead," a company official said. While the company is currently restricting its total borrowings at Rs 28,000-30,000 crore band, borrowings are set to increase in the next two years to part finance higher capital requirement. <b>Net profit target </b> The company is targeting 20 per cent increase in net profit for next few years to ensure adequate internal accruals. , 'The aim is to maintain debt-net worth ratio at the current level irrespective of projected higher borrowings during the next few years," the official said.