The minister was peeved at the very cheap valuation of oil PSUs—the three refiners (Indian Oil, Hindustan Petroleum and Bharat Petroleum) cumulatively are valued at Rs 4.35 trillion, with IOC’s being Rs 2,04,828 crore, BPCL’s at Rs 1,40,850 crore and HPCL’s at Rs 89,761 crore. But this is in stark contrast to new-age companies like Eternal which has reported huge losses but the market values it at Rs 2.9 trillion and Swiggy at Rs 97,277 crore.
When it was pointed out that oil PSUs have very low gross refining margins while private player Reliance has very high margins, oil PSU representatives present at the meeting said RIL calculates its GRM from very complicated metrics while these PSUs calculate only the landed price of crude and the pump prices as GRM metrics.
The minister asked them to follow what others follow in calculating GRMs, which is one of the key metrics that investors look at in an oil refiner.
“These three oil companies have paid Rs 42,000 crore in dividends last fiscal and contributed 8% of GDP and 20% of corporate India’s revenue. Moreover all of them are hugely profitable. Still they are valued so cheap with their collective market cap adding up to only 1% of the total market capitalization. Something has to be done to correct this,” the minister said.
He said the country is producing more energy than ever before. “With the rapidly growing demand for energy, we have diversified our energy sources. Earlier, we imported from 27 countries; today, we import from 40 countries,” Puri said.
He also said the concerns being aired in some quarters about ethanol blended petrol are baseless as all the stakeholders in the auto fraternity have found no basis to the worries.