India’s Bharat Petroleum Corp. is in talks with lenders to raise about ₹billion rupees ($3.8 billion), according to people familiar with the matter, in what could be the biggest local-currency loan in the country this year.  

The state-run oil company has already received expressions of interest, with the nation’s largest lender, State Bank of India, set to lead the transaction, the people said, asking not to be identified because the deliberations are private.

The proposed deal would help the expansion of one of India’s biggest refiners at a time when the country is boosting its petrochemical capacity to keep pace with growing plastics consumption.

The heightened interests among banks also reflect their eagerness to increase lending to large corporates, broadening their credit business beyond small to midsize companies.

Punjab National Bank, Bank of Baroda and Bank of India are some of the other lenders on the 15-year loan, and more may join, the people said. It may be priced around 8.4 per cent level, one of the people said. 

The loan will be used for the company’s expansion of its Bina refinery in the central Indian state of Madhya Pradesh, the people said. BPCL is investing ₹490 billion to build an ethylene cracker plant at the refinery.

If the deal materializes, it would be the country’s largest rupee-denominated loan in 2024 so far, according to data compiled by Bloomberg.

SBI Capital Markets Ltd., the investment banking unit of the State Bank of India, is the adviser to the loan deal, the people said.

A representative for BPCL and the banks didn’t immediately respond to requests seeking comment.

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