Indian Oil to float unit to carry out finance activities in GIFT City, Gandhinagar
New Delhi: Indian Oil Corporation (IOC), the nation's largest oil firm, said on Thursday it will float a new company to carry out finance activities including global treasury services in GIFT City, Gandhinagar. In a stock exchange filing, IOC said its board has accorded approval for the formation of a wholly-owned subsidiary and opening its office in the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (Gift City) in Gandhinagar.
The GIFT City-IFSC became operational in April 2015 and the government and the government of Gujarat have provided a competitive tax regime for promoting business. Regulatory reforms have been undertaken to facilitate the growth of financial services intermediaries in IFSC.
Indian Oil to open IOC Global Capital Management IFSC
To avail of the business opportunities and fiscal benefits offered in the GIFT City-IFSC, the IOC board approved the proposal for the opening of a finance company called 'IOC Global Capital Management IFSC Ltd'.
The unit will "carry out finance activities including activities like fund pooling of foreign companies and utilising the same for carrying out trade financing of IOC and group companies."
It would also do global treasury operations and utilising IFSC to raise capital and debt from overseas markets.
It will utilise IFSC for inbound investment from foreign partners and outbound investments of IOC and be the gateway for reinsurance business, it said, adding the unit would also invest in foreign securities.
IOC, in its endeavour to achieve growth and become an integrated oil and gas major, has grown into many new areas of business like alternate energy and natural gas. To fuel this growth, the firm raises finance from multiple sources.
Keeping these growth ambitions in mind, IOC believes it is imperative that new innovative business structures are created that can source funds and provide a better and more efficient investment structure for fuelling the growth of the company.
Finance company to help pool resources of overseas group companies
IOC Director (Finance) Sandeep Kumar Gupta explained, "To begin with, it is proposed that trade financing activities to be started by pooling of resources of the overseas group companies and their associates. Going forward depending upon opportunities and requisite approvals from authorities, the scope of finance company shall be enhanced, and funds generated by the proposed finance company can be used for making outbound investments and funding capex requirement of IOC."
To date, only India International Bullion Exchange IFSC limited (IIBX) has registered itself as a finance company in GIFT City IFSC.
IOC will be the first commercial non-finance company to commence its operations as a finance company in GIFT City – IFSC.
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