Indian Oil Corporation Ltd. makes a corporate announcement

Assuming “this project” refers to the Barauni Refinery expansion, the outlay appears to fit within IOC’s broader annual capex envelope rather than being an incremental amount on top of it. In a mechanical full-debt funding scenario, consolidated debt-to-equity would rise from 0.53:1 at March 2026 to approximately 0.61:1; the actual increase should be smaller because the project was already 90.5% complete before its expected August 2026 commissioning. ^{[1] [2] [3]}

Capex reconciliation

• The Board revised the Barauni project cost from Rs 13,779 Crores to Rs 16,724 Crores, an increase of Rs 2,945 Crores. ^[3]
• A separate March 2026 project table shows the gross approved cost as Rs 18,113 Crores, creating a disclosure inconsistency with the April 2025 Board filing. ^[2]
• A standalone FY25 capex guidance figure is not reported in the cited filings. The closest disclosed benchmark is the FY25-26 plan of Rs 33,494 Crores, with total annual capex, including JVs and subsidiaries, indicated at Rs 30,000-40,000 Crores. ^[4]
• On the Board-revised Rs 16,724 Crores cost, the project represents:
• 49.93% of the Rs 33,494 Crores FY25-26 plan;
• 41.81%-55.75% of the Rs 30,000-40,000 Crores annual range; and
• 51.61% of the Rs 32,405 Crores capex actually incurred in FY25-26. ^[2]
• These percentages are only scale comparisons: the project cost is a multi-year approved outlay, whereas annual capex guidance is a one-year spending flow. It should therefore not be interpreted as consuming half of one year’s capex allocation.

Debt-to-equity impact

IOC reported March 2026 consolidated borrowings of Rs 1,20,089.13 Crores, equity of Rs 2,25,547.11 Crores, and a debt-to-equity ratio of 0.53:1. ^[1]

• Derived full-debt case: adding the entire Rs 16,724 Crores project cost to borrowings, with equity unchanged, gives approximately 0.61:1.
• Using the later Rs 18,113 Crores project figure produces a similar 0.61:1 result. This is derived from the reported March 2026 balance sheet and the two disclosed project costs. ^{[1] [2] [3]}
• This remains below IOC’s stated objective of keeping debt-to-equity around or below 1:1. ^[1]

The 0.61:1 figure is an upper-bound sensitivity, not management guidance. Since 90.5% of the project was already complete and commissioning was expected in August 2026, much of the financing is likely already reflected in the balance sheet; the post-commissioning ratio will depend on the residual spend, funding mix, retained earnings and any debt repayment. ^[2]

The funding mix for the Paradip SAF project is not yet confirmed. IOC has disclosed a 50:50 JV ownership structure, not a 50:50 debt-equity funding split. The project cost is estimated at Rs 1,063.60 Crores, with a ±30% range, subject to NITI Aayog and DIPAM approvals ^[5].

• Ownership: IOC and M11 Energy Transition will each hold 50% of the JV ^[5].
• Indicative IOC share of project cost: Rs 531.80 Crores, derived mechanically as 50% of Rs 1,063.60 Crores. This is an ownership-based allocation, not a confirmed equity contribution or funding commitment.
• Debt-equity ratio: Not disclosed for this project.
• Incremental borrowing versus internal accruals: Not quantified or specifically allocated. IOC’s annual report states that equity, retained earnings, internal accruals and debt are the overall funding sources for its businesses, but does not ring-fence the SAF project’s financing between these sources ^[6].

IOC’s consolidated debt-equity ratio was 0.69x as of June 30, 2026, versus 0.53x as of March 31, 2026 ^[7]. This shows higher company-level leverage after the year-end, but the increase cannot be attributed to the SAF project. Separately, IOC reported Rs 17,000 Crores of outstanding privately placed unsecured debentures as of June 30, 2026, used for refinancing existing borrowings and/or capital expenditure, without deviation from the stated purpose ^[8]. There is no project-level earmarking linking this borrowing to the Paradip SAF facility.

Conclusion: the only confirmed funding-related fact is the 50:50 ownership split. The debt-equity mix and the proportion funded through incremental borrowing versus internal accruals remain undisclosed; any precise project-level financing ratio would be speculative.