InvestorQ : Why is IOC integrating its petchem and textiles business and what does it mean?
Anjana Aiyar made post

Why is IOC integrating its petchem and textiles business and what does it mean?

Answer
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Khushi Patel answered.
2 weeks ago


Indian Oil will not only expand its petchem capacity but also integrate the same with its textile business. This is likely to offset the impact of low gross refining margins or GRMs, which all oil refiners are currently being subjected to.

According to IOC, India’s per capita consumption of petrochemicals is among the lowest in the world, but consumption could rise sharply in the coming years. The idea is that the improved margins in petchem will act as a hedge for the risk in GRMs.

IOC has grand plans to expand its petchem capacity by more than 70% from its current capacity to 3.2 MTPY. Most refiners are running low output levels resulting in negative GRMs, especially as hinted by the Singapore GRM benchmark.