Shares of Chennai Petroleum witnessed brisk buying today after private sector lenders ICICI Bank and Axis Bank said they had picked up a stake in the proposed joint venture between Indian Oil Corporation and Chennai Petroleum Corporation.
Shares of Indian Oil Corporation also attracted good buying support.
In a regulatory filing with the BSE, ICICI Bank said the joint venture will be incorporated through a seed capital of Rs 5 lakh. ICICI Bank will subscribe to 10 per cent of total paid-up capital of the joint venture at a cost of Rs 50,000.
The joint venture is proposed to be incorporated through seed capital of Rs 5 lakh.
"ICICI Bank as seed equity investor does not have any obligation to fund the future equity requirement of the project, beyond initial seed capital contribution of Rs 50,000," the filing added.
Indian Oil and Chennai Petroleum will hold 25 per cent each in the joint venture which will implement a 9-MMTPA refinery at Nagapattinam in Tamil Nadu.
In a similar filing with BSE, Axis Bank said it will acquire 10 per cent shareholding of the proposed joint venture at a cost of Rs 50,000.
The insurance arm of ICICI group ICICI, Prudential Life Insurance, also informed stock exchanges that it will pick up a 9 per cent stake at a cost of Rs 45,000.
The participation of private sector players as seed investors led to the shares of Indian Oil and Chennai Petroleum rising.
Indian Oil closed the day with over 3 per cent gains at Rs 72.05 on BSE, while Chennai Petroleum was up 3.76 per cent at Rs 198.70. Chennai Petroleum rose over 5 per cent intraday.
Shares of the ICICI Bank, Axis Bank and ICICI Prudential also gained in the range of 0-1 per cent.