Bharat Petroleum Corporation Ltd (BPCL) is raising up to Rs 18,000 crore through a rights issue to finance its net zero carbon emission projects.

The government, which holds almost 53 per cent of the fuel marketing and refining company, is likely to subscribe to the rights issue.

Union finance minister Nirmala Sitharaman in her 2023 Budget speech had announced an outlay of Rs 35,000 crore to achieve the country’s energy transition and net zero objectives.

This is expected to support the plans for renewable energy of three state-run fuel retailers: BPCL, Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation Ltd (HPCL).The government has not announced how the Rs 35,000 crore will be split among the three fuel retailers.

In a regulatory filing, BPCL said that its board at a meeting held on Wednesday “approved the proposal for raising capital to an amount not exceeding Rs 18,000 crore.

This capital will be raised by way of the issue of equity shares on a rights issue basis to eligible equity shareholders of the corporation as on the record date.”

The detailed terms of the rights issue including but not limited to the issue price, rights entitlement, record date, timing and terms of payment will be intimated separately after the board’s approval in due course.

IOC, which is also planning to launch a rights issue, last week approved the doubling of its authorised share capital to Rs 30,000 crore.HPCL, which is majority owned by state-owned Oil and Natural Gas Corporation (ONGC), is likely to makea preferential share allotment to the government to get the capital infusion, a PTI report said.

Shares of BPCL settled at Rs 365.20 on the BSE on Wednesday, a gain of 1.39 per cent over its previous close.

BPCL’s selloff has remained stalled; in November 2019, the cabinet first cleared the Centre’s plans to divest its stake in the downstream oil company.

The PSU’s net profit more than doubled in the January-March quarter following a recovery in fuel marketing margins and better refining margins.

Its standalone net profit came in at Rs 6,478 crore compared with Rs 2,501 crore in the same period in the previous year.

Due to the strong quarterly performance, the company posted Rs 1,870.10 crore of net profit for the full fiscal year 2022-23.