Bharat Petroleum in talks to secure Rs 32,000 cr loan for refinery expansion
Mumbai: Bharat Petroleum Corp. (BPCL) is in discussions with lenders to secure nearly Rs 32,000 crore ($3.8 billion), which could become the largest local-currency loan in India this year, Bloomberg reported.
The state-owned oil company has already received expressions of interest. The State Bank of India (SBI), the country's largest lender, is expected to lead the transaction, according to the report.
This proposed deal is intended to support the expansion of one of India's leading refiners, at a time when the nation is enhancing its petrochemical capacity to meet the growing demand for plastics.
The strong interest from banks reflects their desire to increase lending to large corporates and diversify their credit portfolios beyond small and medium-sized businesses.
Other lenders, including Punjab National Bank, Bank of Baroda, and Bank of India, are involved in the 15-year loan, with more institutions potentially joining. One source mentioned that the loan might be priced around 8.4%.
The funds will be used for BPCL’s expansion of its Bina refinery in Madhya Pradesh, where the company is investing Rs 49,000 crore to construct an ethylene cracker plant.
If finalized, this would be India's largest rupee-denominated loan in 2024, according to Bloomberg data.
SBI Capital Markets Ltd., the investment banking arm of SBI, is advising on the loan deal. Representatives for BPCL and the banks did not immediately respond to requests for comment.
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