Indian Oil Corporation (IOC) may acquire up to 49% stake in proposed joint venture with Nuclear Power Corporation of India (NPCIL)

In a bid to hike its stake prospects, the Indian Oil Corporation is in a move that may result in its acquisition of up to 49 per cent stake in a proposed joint venture with the Nuclear Power Corporation of India. The move may effectively quash an earlier stake offer of 26 per cent that Indian Oil Corp. had announced.Reports have emerged regarding the investment in the Indian media, with sources in Nuclear Power Corporation of India confirming the move. Senior Nuclear Corporation of India officials were quoted confirming Indian Oil Corporation had indeed showcased its interest in such a move and talks may be underway.

JK Ghai, Nuclear Power Corporation of India finance director said Indian Oil Corporation had written to them internally notifying them that it will acquire a 49 per cent stake in the proposed joint venture between the two firms. The joint venture will see the two firms own the seventh and eighth units of Rajasthan facility of 700 megawatts each.

Indian Oil Corporation is a state run firm and earlier on, it had reiterated that it was planning to invest around Rs 961 Crore for the acquisition of a 26 per cent shareholding in Nuclear Power Corporation of India. According to Indian National Oil, the 26 per cent stake was to enable it establish a 1,400 megawatts nuclear power project with Nuclear Power Corporation of India Ltd.

The project is being set up at a total outlay of Rs 12,000 crore, to be financed in the debt-to-equity ratio of 7:3. The state-run nuclear power producer is also forming joint ventures with other public sector enterprises such as National Aluminum Co and NTPC.

Nuclear Power Corporation of India may exceed its annual generation target of 22 billion units for 2010-11 due to availability of imported fuel, Mr. Ghai said. In April-September, the utility generated 10.85 billion units of electricity, up 5 per cent from the target for the period. With this trend, the total generation in 2010-11 is expected to be about 10% higher than the target fixed for the corresponding period, added Ghai.

Indian Oil Corporation is an Indian state-owned oil and gas company. It is India’s largest commercial enterprise, and its subsidiaries account for a 47% share in the petroleum products market, 40% share in refining capacity and 67% downstream sector pipelines capacity in India.