Govt stake sale not to impact IOC's ratings Moody


BENGALURU: The government's 10 percent stake sale in Indian Oil Corp (IOC) will not have any impact on the company's ratings, Moody's Investors Service and Fitch Ratings said on Wednesday. In separate statements issued on Wednesday, the two global agencies said that after the stake sale, the government will continue to hold a majority stake of 58.57 percent in IOC. The government on Monday sold 10 percent stake in IOC through an offer for sale and raised over Rs 9,300 crore. Moody's Investors Service said IOC's ratings remain supported by its strategic importance to the country, given its position as India's largest refiner and distributor of petroleum products. "The government will retain its majority stake in the company after the stake sale, and as such does not affect our assessment of sovereign support for IOC," Moody's VP and Senior Credit Officer Vikas Halan said. Fitch Ratings said refiner Indian Oil Corporation's ratings is "unaffected" by lower state stake. The other two smaller state-controlled oil refining and marketing companies -- BPCL and HPCL -- historically have had lower state ownership at 55 percent and 51 percent, respectively, it added. "Fitch believes that the state continues to have close operating and strategic linkages with these entities despite the recent reforms in fuel prices and subsidy schemes. "We believe these three companies will continue to be important policy tools that the state will use to meet socio-economic objectives when required," it further said. Moody's added that it would reassess the level of government support incorporated in the company's ratings only if the government's shareholding falls below 51 percent, or if there are other indicators of a change in the relationship between the government and IOC. "However, we see this as an unlikely scenario, given the strategic importance of IOC as the country's largest downstream oil company with a 31 percent share of the domestic refining capacity," Halan said.

IOC stock price On August 27, 2015, Indian Oil Corporation closed at Rs 409.20, up Rs 15.30, or 3.88 percent. The 52-week high of the share was Rs 465.40 and the 52-week low was Rs 307.00. The company's trailing 12-month (TTM) EPS was at Rs 37.83 per share as per the quarter ended June 2015. The stock's price-to-earnings (P/E) ratio was 10.82. The latest book value of the company is Rs 279.95 per share. At current value, the price-to-book value of the company is 1.46.

Read Also: Online System For Green Clearance Of State Projects Launched

NASA's New Horizon Probe Captures Mysterious Spots On Pluto Surface

Source: PTI