Bharat Petroleum Corp. (BPCL) is in discussions with lenders to secure a loan of about Rs 32,000 crore ($3.8 billion). This could become the largest local-currency loan in India this year.
The state-owned oil company has already received interest from lenders, with the State Bank of India (SBI), the country’s biggest lender, expected to lead the deal. The discussions are private, and the people sharing this information have asked not to be identified.
The loan would support BPCL’s plans to expand its refinery in Bina, located in Madhya Pradesh, central India. This comes as India is increasing its petrochemical capacity to meet the rising demand for plastics. Banks are showing keen interest in the loan, as they are looking to expand their lending to large corporations.
Other banks involved in the 15-year loan include Punjab National Bank, Bank of Baroda, and Bank of India, with more banks potentially joining. The loan might be priced at an interest rate of around 8.4%.
BPCL is investing Rs 49,000 crore to build an ethylene cracker plant at the Bina refinery as part of its expansion plans.
If finalized, this loan would be the biggest rupee-denominated loan in India in 2024 so far, based on Bloomberg data. SBI Capital Markets Ltd., a division of State Bank of India, is advising on the loan deal. BPCL and the banks have not yet commented on the negotiations.
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