ICICI Bank Ltd. is set to buy a stake in the proposed oil refining joint venture between the Indian Oil Corporation Ltd. and Chennai Petroleum Corporation Ltd.
The private lender has entered into an agreement to invest in the proposed joint venture aimed at setting up a petroleum refinery in Nagapattinam in Tamil Nadu, according to the bank’s exchange filing on Wednesday.
Both IOCL and CPCL will hold an equity stake of 25% each in the refinery, which is proposed to have a capacity of 9 million metric tons per annum, the filing said.
While the joint entity for the project is yet to be incorporated, ICICI Bank will hold 10% of the equity shares in the project after its investment.
Since the shareholding is at 10%, no additional regulatory clearances will be required for the investment, the bank said in its exchange filing. The bank also said it does not have any obligation to fund the future requirements of the project, beyond the initial seed capital of Rs 50,000.
The refinery will produce petroleum and petrochemical products such as polypropylene.