ICICI Bank said it will be acquiring 10 percent stake in a proposed joint venture of Indian Oil Corporation and Chennai Petroleum Corporation, sending shares of the last two companies surging.
The target entity which will be incorporated through seed capital of Rs 5 lakh will see the ICICI Bank buy 10 percent stake for Rs 50,000.
The lender's acquisition will be completed within 180 days from the date of joint venture agreement.
"ICICI Bank as seed equity investor does not have any obligation to fund the future equity requirement of the project, beyond initial capital contribution of Rs 50,000," the lender said.
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The joint venture aims to set up a nine million metric tonne per annum refinery at Nagapattinam, Tamil Nadu. Indian Oil Corporation and Chennai Petroleum Corporation will together hold 50 percent stake (25 percent each), ICICI Bank 10 percent and the balance would be held by Axis Bank, HDFC Life Insurance, ICICI Prudential Life Insurance, and SBI Life Insurance.
HDFC Life will be infusing Rs 55,000 as seed capital for acquiring 11 percent
shareholding of the target entity.
At 11:45 am, Indian Oil Corporation was quoting at Rs 71.90 apiece on NSE, up 2.86 percent. Chennai Petroleum Corporation was higher by 5 percent at Rs 200.70.
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