The Hindu Business Line : IOC plans to retain IBP brand post-merger

New beginning
Combine operates total of 16,000 retail outlets
IBP is smallest PSU in oil retail business
Awaiting nod of Ministry of Company Affairs

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New Delhi Feb 5 IOC will continue with the IBP fuel retail brand even after IBP Co Ltd ceases to exist post-merger with the parent.

Speaking to Business Line, Mr V.C. Agrawal, Managing Director of IBP, said: "We will retain the IBP brand for the time being. The two brands, IBP and IndianOil, would co-exist."

Brushing aside all speculation that the IBP brand would be phased out once the merger is completed, Mr Agrawal said: "It takes a long time and huge investment to build a brand name."

IOC, which is expecting to complete the merger of IBP with itself at the earliest, has already kicked off the synchronisation of operations between the two through sharing of infrastructure logistics.

Besides, the company has responded to all the queries raised by certain investors on the merger proposal and now the final orders from the Ministry of Company Affairs (MCA) is awaited. IOC had bought the Government's 33.58 per cent equity in IBP in 2002.

It had acquired another 20 per cent through an open offer to make the standalone marketing company its subsidiary. The Government sold its residual 26 per cent in IBP through a public offer.

IBP, with about 10 per cent share in diesel and a little over eight per cent share in petrol sales in the total sales in the country, is the smallest PSU in the oil retail business. IOC, with 36.88 per cent and 33.84 per cent share in diesel and petrol sales respectively, is the largest.

The number of fuel retail outlets operational under the IBP brand name stands at 3,500. IBP and IOC together operate close to 16,000 retail outlets.

IBP, which was hit the most by the fluctuations in crude prices, posted Rs 107-crore profit for the first nine months of the current fiscal, compared to a loss of Rs 521 crore during the corresponding previous period.

For the third quarter, the company has reported net profit of Rs 732 crore.

This was mainly on account of oil bonds worth Rs 1,171 crore and subsidy contribution from upstream companies to the tune of Rs 832 crore, which the company has factored in, he said.

IBP closed last fiscal with a profit of Rs 12.4 crore. During the current fiscal, the under-realisation on sale of petrol and diesel below cost price has come down to Rs 235 crore.

With regard to sales, Mr Agrawal said that during the third quarter the company has clocked 9.4 per cent growth in diesel sales and 4.6 per cent in petrol sales over the corresponding previous period.

For the nine-month period, diesel sales increased by 6.4 per cent while petrol sales rose by 2.8 per cent.

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