Shares of Chennai Petroleum saw active buying today after private sector lenders ICICI Bank and Axis Bank said they had bought stakes in a proposed joint venture between Indian Oil Corporation and Chennai Petroleum Corporation.
Shares of Indian Oil Corporation also attracted good buying support.
In a regulatory filing with the BSE, ICICI Bank said the joint venture will be established with a seed capital of Rs 5 lakh. ICICI Bank will subscribe 10% of the total paid-up capital of the joint venture at a cost of Rs 50,000.
The joint venture is to be established with a seed capital of Rs 5 lakh.
“ICICI Bank as a seed equity investor is not under any obligation to finance the project’s future equity requirements beyond the initial seed capital contribution of Rs 50,000,” the document added.
Indian Oil Corporation and Chennai Petroleum Corporation will each hold a 25% stake in the joint venture, which will build a 9-MMTPA refinery in Nagapattinam, Tamil Nadu.
In a similar filing with the BSE, Axis Bank said it would acquire a 10% stake in the proposed joint venture at a cost of Rs 50,000.
Prudential Life Insurance, the insurance arm of ICICI Group ICICI, also notified the stock exchange that it will acquire a 9% stake for Rs 45,000.
Participation of private sector players as seed investors led to higher share prices of Indian Oil Corporation and Chennai Petroleum Corporation.
Indian Oil Corp closed the day more than 3 percent higher at Rs 72.05 on the BSE, while Chennai Petroleum rose 3.76 percent to close at Rs 198.70. Chennai Petroleum rose more than 5 percent intraday.
Shares of ICICI Bank, Axis Bank and ICICI Prudential were also up 0-1%.
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