HPCL cuts Rajasthan refinery debt costs by ₹1,000 crore annually

Hindustan Petroleum Corporation Limited (HPCL) has completed a major refinancing of ₹50,000 crore in debt associated with its Rajasthan refinery project, the company announced Friday. The refinancing, which became effective on October 3, has lowered the company's borrowing costs by around 105 basis points, according to Chairman and Managing Director Vikas Kaushal.

The restructuring is projected to deliver annual interest savings between ₹470 crore and ₹550 crore, Kaushal told analysts during an earnings call. Beyond the refinancing exercise, HPCL plans to deploy additional equity infusions and convert subordinated loans into equity to further reduce the refinery's financing burden as the facility scales up production.

The Rajasthan refinery, with a nameplate capacity of 9 million tonnes per annum, was constructed at a total cost of ₹79,459 crore. HPCL holds a 74 per cent stake in the facility through its subsidiary HPCL Rajasthan Refinery Limited, with the Government of Rajasthan owning the remaining 26 per cent. The state government is also expected to extend interest-free financial support to ease the project's debt servicing obligations.

The debt restructuring underscores HPCL's efforts to optimize capital efficiency at one of India's major refining assets as it ramps up operations at the Rajasthan location.