State-run public sector oil major Indian Oil Corporation has seen a Rs 20,000 crore reduction in its net borrowing level (net debt) during the first quarter of the current financial year, according to the company’s chief financial officer Sandeep Kumar Gupta. A large part of this reduction has come from the settling of the government’s pending dues, he noted.
Speaking to analysts in a post earnings conference call, Gupta pointed out that the company’s borrowing levels have decreased by around Rs 14,000 crore compared to the end of the previous quarter.
“(This) stands at Rs 72,227 crore as compared to Rs 86,359 crore as on March 31, 2019. It may also be noted that this borrowing is inclusive of about Rs 4,000 crore, which is because of accounting of lease obligations pursuant to Ind AS 116. Correspondingly, if we exclude this and factor in an investment of Rs 1,600 crore, which stands in our balance sheet as of June 30, 2019, then the comparable borrowings work out to Rs 66,627 crore as compared to Rs 86,359 crore as on March 31, which is a drop of over Rs 20,000 crore. This has been possible only because of settlemIOC's CEO ent of our government dues,” he said.
Gupta also said an improvement in the company’s net debt levels going forward will also depend on the government’s borrowing position (or its dues position). “Presently, the GoI dues are down to Rs 9,200-9,700 crore. So if we get, claims settled on a regular basis, then definitely borrowings will be at this level. But, if the GoI dues go up, at the end of the year, then definitely there will be an increase (in borrowings),” Gupta said.
According to the CFO, the government opening dues as at the end of March 31, 2019, had stood at Rs 19,121 crore, which has now come down to Rs 9,772 crore at the end of the first quarter of 2019.
Indian Oil also has a capital expenditure plan of about Rs 25,000 crore for the current fiscal year, with Gupta stating that the company spent around Rs 4,250 crore during the quarter. “And we have a whole list of projects where the capital expenditure is going on, they range from all verticals, refinery pipeline, marketing, petrochemicals, Exploration and Production,” he said.