Indian Oil Corporation ramps up ahead of free share issue; What investors need to know


CIO share price: Shares of oil marketing firm Indian Oil Corporation (IOC) jumped more than 3% to Rs 75.55 apiece on BSE as the stock began trading ex-bonus during the session. Thursday. Last month, the company said its board had reviewed and approved free share issues.

The board of the company in its filing said, “The board recommended the issuance of free shares in a ratio of 1:2 i.e. one new free share of Rs. 10/ – each for two existing shares of Rs. 10/- each fully paid subject to shareholder approval by postal vote. The Board set July 1, 2022 as the closing date for the accounts to determine the eligibility of shareholders for free shares.

Indian Oil Corporation Ltd., incorporated in 1959, is a large capitalization company (having a market capitalization of Rs 1,00,119.58 Crore) operating in the oil and gas sector. The main products/revenue segments of Indian Oil Corporation Ltd. include petroleum refinery products, other operating revenue, other services, sale of services, scrap metal and grants for the year ending March 31, 2021.

IOC Finances

Indian Oil reported a 31% drop in net profit for the fourth quarter ended March 2022 as record refining margins were wiped out by margin compression in petrochemicals and losses on automotive fuel sales. Standalone net profit of Rs 6,021 crore in January-March, compared to Rs 8,781 crore in the same period a year ago. Sequentially, the profit was above Rs 5,861 crore in the previous quarter.

The state-owned oil marketing company reported revenue of Rs 2,06,461 crore in the quarter under review, compared to Rs 1,63,733 crore recorded in the corresponding quarter of the previous fiscal year. The base gross refining margin (GRM) or current GRM price for the year 2021-22 after offsetting inventory gains was $7.61 per barrel, the company had said.

The board had also recommended a final dividend of Rs 3.60 per share having a par value of Rs 10 each (before bonus), which translates to a final dividend of Rs 2.40 per share having a par value of Rs 10 each (after bonus) for the 2021-22 financial year.

Share price history

The stock quoted a 52-week low of 67.73 rupees and a high of 94.5 rupees. At the prevailing price, the stock traded at 4.25 times its 12-month EPS of 17.78 rupees per share and 0.82 times its book value, according to BSE data. The certificate was an outperformer, up 4.97% in the past year compared to a 0.77% gain in Sensex.

What are the brokers saying?

ICICI Securities has a call to buy on Indian Oil Corporation with a target price of Rs 145. The current market price of Indian Oil Corporation is Rs 106.65. The period given by the analyst is one year when the price of Indian Oil Corporation Ltd. can achieve the set goal.

The views and investment advice of the experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before making any investment decision.

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