The Indian Oil Corporation (IOC) has tied up with Akbarally’s, a domestic retail chain, for setting up convenience stores at its petrol pumps.
IOC is India's largest company. It dominates the oil sector with a refining capacity of almost 30.55 million tonnes and a 55% market share. Its distribution network includes 6,779 petrol pumps, 3423 dealers and 2902 LPG distributors.
This move would open up another revenue stream for IOC. The company already has plans for owning 30% of its outlets. Internationally, petrol pumps earn almost 50% of their revenue from the retail outlets.
IOC plans to have cybercafes as well as ATMs at its petrol pumps. With the Akbrally’s tie up the company would have a comprehensive shopping facility in place as well. The brand name of Akbarally’s would also rub off on the IOC shopping arcade.
With the refining scenario getting more competitive in the country and the trend not likely to change in the future, a second revenue stream would be crucial for the company.
Most analysts have rated IOC as hold primarily due to its plans to issue further equity and get its stock listed on the New York Stock Exchange. Besides, the impact of the higher crude prices could impact its bottomline growth in the next quarter.
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