HPCL gets nod from Environment Ministry; soars 3.5%

Amid a dull market day on Tuesday morning, the state-owned oil and natural gas company Hindustan Petroleum Corporation (HPCL) spikes up about 3.4 per cent as the company gets a nod from the Environment Ministry for an expansion project of its Mumbai refinery in Maharashtra, which is worth Rs 3,846 crore.

With this proposed expansion, the company's Mumbai refinery will produce gasoline and diesel meeting Euro IV quality specifications, besides other petroleum products like kerosene, ATF, fuel oil, sulphur, naptha and LPG. This will help the company to meet the expected market demand in this segment.

The premises of the new facilities will be built in 2.1 acres and the project will be concluded in 36 months. This will expand company's refining capacity of the specified refinery located in Chembur, Mumbai, from 7.5 million tonnes per annum (MTPA) to 9.5 MTPA, which includes propylene recovery unit (PRU) and revamp of captive power plant (CPP).

The Environment Ministry has given environment clearance to this project, subject to clearance of some conditions. The conditions includes imparting training to employees on safety and health aspects of handling chemicals, setting up a separate environment management cell with fully-equipped labs to facilitate environmental management and monitoring.

Further, HPCL is planning to raise USD 500 million for expanding its Visakhapatnam refinery and other projects which are there in the pipeline.

Reacting to this, the shares of HPCL has gained almost 3.5 per cent during the first half of Monday's trading session. The stock is already trading above its 50 and 200DMA of 468.69 and 397.93 respectively, which shows the strength of the stock. Investors are also expecting to get some boost from its Q3 result which will be announced on February 13, to take the stock higher from here.