Numaligarh stake sale to Assam govt will improve OIL liquidity: Moody’s Investors Service

Moody’s Investors Service on Wednesday said Oil India (OIL) transferring 4.9% shareholding in Numaligarh Refinery to the Assam government for Rs 786.4 crore is credit positive for the company, and will improve its liquidity and financial flexibility. The proceeds from the stake sale have been used to partially repay the short-term debt taken to acquire additional stake of the refinery in March 2021, the agency noted.

The company, in March, had acquired 54.2% stake in Numaligarh Refinery from Bharat Petroleum Corporation (BPCL) for Rs 8,676 crore. Of this, around a 10.5% stake — worth around Rs 1,690 crore — was acquired on behalf of the Assam government with an understanding that the state would repurchase these shares in the ongoing fiscal. Including the current sale, OIL has already transferred around 8.01% stake in the refinery to the state government, and Moody’s expects the company to divest the balance stake over the next few months for Rs 400 crore.