The League of Champions
New Delhi   28-Oct-2009
<b>The race for the top position in the BW 500 ranking is getting close and intense</b> India's biggest company, public sector oil refiner and marketer IndianOil, is struggling to hold on to its coveted appellation, with Reliance Industries (RIL) breathing down its neck. In all likelihood, RIL could overtake IndianOil in the BW Real 500 rankings in the next year or two. Rankings are one part, but what maybe more worrying for IndianOil are the profit numbers, which fell by 67.7 per cent in fiscal 2009 compared to the previous financial year. "The fall in profits was a consequence of many factors such as high price and the volatility in the international oil market, huge borrowing and high interest rate," says Mr. Sarthak Behuria, chairman of IndianOil. Despite a total income of Rs 3, 17,724.84 crore, according to CMIE data, IndianOil's net profit is at a lowly Rs 1,845.34 crore. The company's total income is still almost double that of RIL's. But in comparison, RIL's net profit of Rs 15,360.90 crore on a total income of Rs 159,991.68 crore looks much more impressive. From a shareholder's point of view, too, RIL has a market capitalization that is five times that of IndianOil's. RIL's 2008-09 operating profits at Rs 20,055 crore are also almost double that of IndianOil's. IndianOil is trying to fend off the RIL offensive by diversifying into petrochemicals and oil exploration. A naphtha cracker plant with a capacity of 800,000 tonnes per annum of ethylene and 600,000 tonnes per annum of propylene is up and running. The company has also bagged two oil fields at the recently concluded New Exploration Licensing Policy (NELP) VIII. This will add to its nine other overseas exploration and production projects that are likely to show results in the next seven .to 10 years. "Upstream is a risky business, so we are very careful," says Mr. Behuria. "We also have some global acquisition plans." Getting bigger has just become tougher.