Top banks scramble for PSU refinery's loan deal

India's top lenders are falling over each other to finance a ₹39,000 crore refinery being set up by Chennai Petroleum Corp. and Indian Oil Corp. in Tamil Nadu, in one of the largest corporate loan deals in recent times.

- Shayan Ghosh

State-owned banks like State Bank of India (SBI), Bank of Baroda (BoB) and Punjab National Bank (PNB) are among six lenders which have bid for the loan, two bankers aware of the development said. Of the ₹39,000 crore, 70% or about ₹27,000 crore would be debt, and the rest equity.

Established in January 2023, Cauvery Basin Refinery and Petrochemicals Ltd (CBRPL) is planned as a 75:25 joint venture between Indian Oil Corp. Ltd and Chennai Petroleum Corp. The proposed nine million tonnes per annum (mtpa) refinery will come up at Nagapattinam.

The loan's interest rate is likely to be linked to SBI's three-month marginal cost of funds-based lending rate or MCLR, the two people cited above said on the condition of anonymity. Following a recent revision, SBI's three-month MCLR now stands at 8.55%.