New Delhi, Aug. 29: State-owned Indian Oil Corporation (IOC) today announced bonus shares in the ratio of 1:1 as its first-quarter net profit jumped 25 per cent to Rs 8,268.98 crore.
The board of directors has approved the bonus share, which means the company will issue one equity share of Rs 10 each for every fully-paid up share of Rs 10 each, subject to the approval of the shareholders.
According to the capital restructuring rules for central public sector enterprises (CPSEs) notified by the government in May, every PSU "shall issue" bonus shares if its reserves and surplus are equal to or more than 10 times its paid-up equity share capital.
The Centre believes that many central public sector enterprises, flush with reserves but not investing commensurately, are refraining from issuing bonus shares, officials said.
The government, which holds a majority stake in IOC, will be the key beneficiary of the move.
IOC is the country's largest commercial entity with a sales turnover of Rs 3,99,601 crore ($61 billion) and profit of Rs 10,399 crore ($1.58 billion) in 2015-16.
It ranks 161 among the world's largest companies - and the first among Indian companies - in the Fortune Global 500 list for 2016.
The government owns a 58.28 per cent stake in Indian Oil, which controls nearly half of the country's fuel market, 35 per cent of the national refining capacity and 71 per cent of downstream pipelines.
Profits jump
IOC has reported a 25 per cent jump in net profit at Rs 8,268.98 crore during the first quarter ended June against Rs 6,590.83 crore in the corresponding period a year ago.
The company earned $9.98 on turning every barrel of crude into fuel during the quarter compared with a gross refining margin of $10.77 per barrel.
Revenues fell to Rs 1,07,670.95 crore from Rs 1,14,200.24 crore during the quarter ended June 2015, following a drop in oil price.
IOC said its Rs 1,331.69-crore revenue loss on the sale of PDS kerosene was fully reimbursed by the government.