Indian Oil Corporation Ltd. has dropped plans to merge Chennai Petroleum Corporation Ltd. with itself.
The decision was taken after Iran’s Naftiran Intertrade Co. agreed to invest in the planned expansion of Chennai Petroleum’s refinery at Nagapattinam, an Indian Oil official told Bloomberg News.
Naftiran Intertrade, the Swiss subsidiary of National Iranian Oil Co., holds 15.4 percent stake in Chennai Petroleum. Indian Oil is the majority owner with 52 percent stake.
In September, Indian Oil board approved Chennai Petroleum's proposal to set up a Rs 27,460-crore, 9-million tonnes per annum refinery in Nagapattinam. Chennai Petroleum currently has a smaller 1 million tonnes refinery in the same district in Tamil Nadu.
Chennai Petroleum fell as much as 4.48 percent to Rs 407 apiece in intra-day trading, which is the most since September 25 this year.