Budget 2024 gives a miss to capital infusion in OMCs. How it impacts BPCL, others?
oil marketing companies (OMCs) today ended in the red after the Union Budget 2024 did not make any budgetary allocation for them for FY25. The development assumes importance given that the government had in its FY24 budget earmarked Rs 30,000 crore for capital support to the OMCs which did not crystallise the financial year gone by.
Shares of Bharat Petroleum Corporation (BPCL) today ended at Rs 306 on the NSE, down by Rs 2.25 or 0.73% over the previous closing price. Meanwhile, Hindustan Petroleum Corporation (HPCL) shares settled at Rs 345 falling by 0.5%. Indian Oil Corporation (IOC) was the top loser falling 1.4% to close the session at Rs 165.85.
Decoding the impact, Nuvama Institutional Equities said that the miss implies that OMCs are expected to continue to bear LPG under-recoveries due to a lack of provisioning. Furthermore, the government’s plan to infuse capital in OMCs appears to have been scrapped, courtesy, lack of budgetary allocations, it said in a note.
The infusion plan appears off the table now, Nuvama opined.
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«BPCL management had indicated in an earlier earnings conference call that the proceeds of the capital-raise were expected to be utilised for achieving its net-zero targets, facilitating energy transition
