(ET)
Four state owned oil companies — Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum and ONGC — together garnered about Rs 12,500 crore in the biggest single-day fund-raising since the lockdown began. Companies sought to raise the short-term funds to meet working capital needs. Fund houses and banks, looking for safe bets, bought these commercial papers (CPs) maturing in a maximum of three months.
“The government-backed oil refiners sought to raise money cheaply, taking advantage of the broader risk aversion,” said Dhawal Dalal, CIO – fixed income at Edelweiss Asset. “Any investor, be it a fund house or a bank, is comfortable investing in these companies that are deemed quasi-sovereign. In periods of economic stress, investors always seek safety rather than higher rates.” Indian Oil Corporation, the largest borrower, sold CPs worth Rs 7,000 crore in three series that will mature in June and July. It offered rates up to 4.99 per cent.
