Bharat Petroleum Corp. (BPCL), one of India’s leading state-owned oil companies, is in discussions with banks to secure a loan of approximately ₹315 billion ($3.8 billion), according to sources familiar with the situation. This could be the largest local-currency loan in India this year.
The company has already attracted interest from several financial institutions, with State Bank of India (SBI) expected to lead the arrangement, according to the sources, who requested anonymity due to the confidentiality of the talks.
The loan will support the expansion of Bharat Petroleum’s Bina refinery in Madhya Pradesh, as the company aims to enhance its petrochemical production capacity to meet the rising demand for plastics in India. BPCL plans to invest ₹490 billion in constructing an ethylene cracker plant at the refinery.
The strong interest from lenders underscores their desire to increase financing for large corporations, diversifying their lending portfolios beyond small and mid-sized enterprises. Punjab National Bank, Bank of Baroda, and Bank of India are among the other institutions involved in the 15-year loan, and additional banks may join the consortium. The loan is expected to be priced at around 8.4%, one source noted.
If finalized, this loan would mark the largest rupee-denominated financing deal in India for 2024, according to data from Bloomberg. SBI Capital Markets Ltd., the investment banking arm of State Bank of India, is advising on the transaction. Representatives from BPCL and the involved banks have not yet commented on the matter.
