Indian Oil Corporation

Particulars
Indian Oil Corporation Limited (IOCL), IndianOil, is an Indian government Particu lar Am o u n t ss

corporation. It is under the ownership of Ministry of Petroleum and Market Capitaliz ation ( ₹ Crore) 95,850.1
Natural Gas, Government of India headquartered in New Delhi. The Total Debt (FY 20) ( ₹ Crore) 116,545.0
Cash and Investments (FY 20) 10,589.1
government corporation is ranked 212th on the Fortune Global 500 list of
EV (₹ Crore) 201,805.9
the world's biggest corporations as of 2021It is the largest government
52 w eek H/L 110 / 71
owned oil corporation in the country, with a net profit of $6.1 billion for Equity capital ( ₹ Crore) 9,181.0
the financial year 2020-21. As of 31 March 2021, Indian Oil's employee Face value (₹) 10.0
strength is 31,648, out of which 17,762 are executives and 13,876 non-
executives, while 2,775 are women, comprising 8.77% of the total
workforce.

Indian Oil's business interests overlap the entire hydrocarbon value-

chain, including refining, pipeline transportation, marketing of
petroleum products, exploration and production of crude oil, natural gas
and petrochemicals. Indian Oil has ventured into alternative energy and
globalisation of downstream operations. It has subsidiaries in Sri Lanka
(Lanka IOC), Mauritius (IndianOil (Mauritius) Ltd) and the Middle East
(IOC Middle East FZE).

Shareholding Pattern

Holder's Name % Share Holding

Promoters 51.5%

Foreign Institutions 7.94%

Banks Mutual Funds 3.38%

Central Govt. 0.11%

Others 22.52%

General Public 5.42%

Financial Institutions 9.14%

Management

Shrikant Madhav Vaidya Chairman

Mr. Shrikant Madhav Vaidya is a Chemical Engineer from the National Institute of
Technology, Rourkela. He has over 34 years of extensive experience in refining &
petrochemicals operations. He has had a decade-long association with India's largest
cracker plant – the Panipat Naphtha Cracker Complex, a major driver of IndianOil's
petrochemicals business – right from the drawing board stage. He is among the
select technocrats in the Indian oil & gas industry who are proficient in all facets of
refinery-petrochemicals integration, desirable for the sustainability of the oil & gas
industry in the long-term.
Sandeep Kumar Gupta Director (Finance)
Shri Sandeep Kumar Gupta is a Commerce Graduate & a Chartered Accountant. He has more than 3 decades of rich
work experience in finance function in IndianOil acquired during his posting at various Refinery units, Refineries
Headquarters and Corporate Office which includes corporate accounts, planning & analysis, treasury functions,
financial concurrence, risk management, etc. Prior to joining as Director (Finance), he was the Executive Director
(Corporate Finance) wherein he spearheaded several stakeholder-friendly initiatives like the maiden Buyback of
Shares, first Integrated Annual Report, transition to IndAS, etc.

Shri Satish Kumar Vaduguri Director (Marketing)

Shri Satish Kumar Vaduguri, is a Mechanical Engineer and holds a post graduate degree in Management from
University of Lubljana, Slovenia. Shri Satish Kumar has over 3 decades of rich experience in marketing of petroleum
products in various geographies of the country.
Prior to assuming charge as Director (Marketing), he was heading the marketing network in the States of Madhya
Pradesh & Chhattisgarh as Executive Director and State Head, Madhya Pradesh State Office. During his career, he has
been instrumental in implementing key business initiatives like Direct Benefit Transfer for LPG consumer (DBTL),
Pradhan Mantri Ujjwala Yojana (PMUY), BS-VI fuel implementation, etc. which have been widely acknowledged for
their social and environmental impact.

SWOT Analysis

Strengths in the SWOT Analysis of IOCL – IOCL SWOT Analysis

Strong Network: With a large distribution network of 10,000 distributors, IndianOil has a brand of LPG cooking gas
called Indane that serves 12 crore households. With the brand Servo, it is a market leader in the lubrication industry.
Every day, 1,750 planes are powered by the company’s 107 aviation fuel systems. IOCL is one of India’s top brands.
Pipeline Network: The corporation owns and operates 13,400 kilometres of cross-country pipelines that transport
crude oil, processed petroleum products, and natural gas. The business just completed the installation of 543
kilometres of new pipeline sections.
State of Art Research and Development Facility: IOCL has the most advanced R&D facility. It has conducted
pioneering research in the fields of lubricants, pipelines, refineries, alternative fuels, engine testing, and
environmental sciences. In India and other countries, the business holds 554 patents.
Focus on Sustainability: The corporation has long believed in sustainability and was an early investor in renewable
energy sources, amassing a 200-MW portfolio of solar and wind generating capacity that is quickly expanding. Under
the government’s Swachh Bharat Abhiyan, IOCL is investing in and researching many waste-to-energy solutions. IOCL
is also the industry leader in transforming the retail network to run on solar energy, with almost one-third of its
gasoline stations using solar power.
Effective Go To Market Strategy: Its Go To Market techniques for its products have been extremely effective.
Good Training Programmes: Successful training and learning programmes have resulted in a highly competent
workforce. IOCL invests heavily in employee training and development, resulting in a team that is not just highly
competent but also driven to achieve more.

Weakness in the SWOT Analysis of IOCL – IOCL SWOT Analysis

Tough Competition: Reliance Industries, ONGC, Hindustan Petroleum, and Bharat Petroleum are IOCL’s key
competitors. Bharat Petroleum, another major rival of IOCL, has invested in different R&D initiatives. It also
operates huge refineries in Mumbai and Cochin and is a Fortune 500 company. To keep ahead of the competition and
avoid losing market share, IOCL must make strategic decisions and investments.
Government Control: IOCL has suffered significant losses as a result of the government’s management of gasoline
pricing policy because the center frequently fails to follow its commitments to keep gasoline costs artificially low.
The corporation continues to borrow more and spend more in order to assure constant fuel supply to consumers, but
growing interest costs slash their profit, limiting their capacity to drive the new project to modernize.
Need more investment in new technologies: Given the scale of expansion and different geographies the company is
planning to expand into, IOCL needs to put more money in technology to integrate the processes across the board.
Right now the investment in technologies is not at par with the vision of the company.

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Opportunities in the SWOT Analysis of IOCL – IOCL SWOT Analysis
Growing Business and Demand: IOCL’s primary business has been transportation and distribution of petroleum
products, as well as refining and other related activities, in response to India’s expanding need for fuel. Over the
years, the firm has extended its activities throughout the hydrocarbon value chain, including oil and gas exploration,
as well as diversification into natural and alternative energy sources.
Market Expansion: IOCL has been steadily extending its business worldwide, with offices in the UAE, Bangladesh,
Myanmar, Mauritius, Singapore, and the United States. The company has also expanded its operations through
collaborative partnerships with reputable partners from both outside and India. Ratnagiri Refinery and
Petrochemicals Ltd. was formed as a joint venture between BPCL and HPCL. The company is performing incredibly
well in the international market and has been able to create several chances for the organization.
Increasing natural gas market: Natural gas is developing as a cleaner alternative to fossil fuels, and the government
of India is pushing for a gas-based economy and measures to utilize it across industries. IOCL obtains liquefied
natural gas (LNG) from overseas suppliers with whom it has a long-term contract. Currently, IOCL distributes LNG to
58 institutional clients in the electricity, fertilizer, steel, and industrial sectors.

Threats in the SWOT Analysis of IOCL – IOCL SWOT Analysis

Government Policies and Regulations: The government’s decision to provide citizens with relief from rising gasoline
costs resulted in massive losses for the corporation. Companies such as IOCL, BPCL (Bharat Petroleum Corp. Ltd),
and HPCL (Hindustan Petroleum Corp. Ltd) were predicted to lose Rs. 9000 crore in net profit. Certain government
actions to reduce fuel and diesel prices have a significant impact on the company’s earnings.
Economic Conditions: The corporation is dealing with a number of issues relating to rising oil costs, currency
fluctuations, and growing worries about air pollution. The company’s goal and primary strategy are to address the
difficulties and possibilities given by environmental circumstances, as well as to integrate and diversify activities
across its worldwide business. In such uncertain conditions, the company’s effort to reduce costs across the supply
chain is a monumental challenge.
Liability Laws: Liability laws in different countries are different and XYZ may be exposed to various liability claims
given change in policies in those markets.
Currency Fluctuations: As the company is operating in numerous countries it is exposed to currency fluctuations
especially given the volatile political climate in a number of markets across the world.

Competition

Reliance Petroleum

Reliance Petroleum is an Indian petroleum company that specializes in oil and energy, owned by Mukesh Ambani of
Reliance Industries Limited (RIL), one of India's largest private sector companies. It is based in Ahmedabad, Gujarat,
India and has interests in the downstream oil business. RPL was merged with Reliance Industries Limited on 29
September 2009.

Reliance Petroleum and RIL own / have long term chartered two oil rigs – DD KG-1 and DD KG-2 (DD standing for
Dhirubhai Deepwater. They are both drilling ships registered in Marshall Islands and owned by Deepwater Pacific
Inc., a subsidiary of Transocean.

ONGC

Maharatna ONGC is the largest crude oil and natural gas Company in India, contributing around 71 per cent to Indian
domestic production. Crude oil is the raw material used by downstream companies like IOC, BPCL, HPCL and MRPL
(Last two are subsidiaries of ONGC) to produce petroleum products like Petrol, Diesel, Kerosene, Naphtha, and
Cooking Gas LPG.
ONGC has a unique distinction of being a company with in-house service capabilities in all areas of Exploration and
Production of oil & gas and related oil-field services. Winner of the Best Employer award, this public sector
enterprise has a dedicated team of around 28,500 professionals who toil round the clock in challenging locations.

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Conclusion

Indian Oil Corp. Ltd plans to invest ₹1 trillion over the next four to five years view the rising demand for petroleum
product. Speaking about India’s energy future and the related opportunities, forecast by various agencies see Indian
fuel demand climbing to 400-450 million tonnes by 2040 from the present 250 million tonnes. This offers enough
legroom for all forms of energy to coexist. As per rating agency ICRA Ltd, petrol and diesel consumption in India is
expected to grow by 14% and 10%, respectively, in FY22. India is a key refining hub in Asia, with an installed capacity
of over 249.36 mtpa. It has 23 refineries and seeks to grow its capacity to 400 mtpa by 2025.
Indian Oil is expanding its petrochemical business in view of growing demand. It is in talks with Russia’s largest
integrated petrochemicals firm PJSC SIBUR Holding to set up a large petrochemical facility in India, but with current
war situation this is unlikely to happen soon.