A large chunk of the amount HPCL borrowed in FY19 went into funding its capex. For the ongoing financial year, the oil marketing company's capex is likely to be around Rs 14,000 crore, as against Rs 11,000 crore last fiscal.
In FY2019-20, India's third-largest oil retailer is expected to invest a total of Rs 5,000 crore into its Mumbai refinery and Rs 21,000 crore into Vizag. Surana said that the investments will happen over a period of time and includes the plan to align refineries with the new BS VI regulation norms, which take effect on April 1, 2020.
"It may happen for various instruments. We have got a combination of instruments which we use via foreign currency borrowings and foreign currency bonds, and may do in multiple tranches," the CMD said.
Surana said that HPCL's debt at the end of FY18-19 stood at Rs 27,244 crore as against Rs 20,991 crore at the end of previous financial year. However, he added that the rise in debt was mainly on account of higher investments in projects and was not a sign of worry for the company. "Our debt-to-equity ratio is quite comfortable, it is not a concern," he added. HPCL's debt to equity ratio stood at 0.97 in FY2018-19 as against 0.88 at the end of FY 2017-18.
While asserting that the oil price would remain around $70-75 per barrel for the next six months if things remain constant, Surana said that fuel demand in India would grow by 4-4.5 percent, diesel by 2.5-3 percent, and petrol by 7-8 percent in the financial year 2019-20.
Commenting on the refining sector's expectations from the next government, HPCL Chairman said he would like the government to consider bringing petro products within the ambit of Goods and Services Tax (GST). "HPCL lost about Rs 400 crore in FY19 for petroleum products not been included under the GST regime," Surana said. This would help the industry reap the benefits of the input tax credit.
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