Hindustan Petroleum Corp. (HPCL) has successfully refinanced approximately ₹50,000 crore of debt associated with its Rajasthan refinery, aiming for a significant reduction in borrowing costs. The refinancing, effective October 3, is projected to yield annual interest savings of around ₹1,000 crore, as stated by Chairman and Managing Director Vikas Kaushal during an earnings call on October 23, 2026.
Refinancing Details
The 9 million tonnes per year refinery, built at a total cost of ₹79,459 crore, is a joint venture where HPCL holds 74% equity and the Government of Rajasthan holds 26%. The refinancing strategy includes:
- ₹8,000 crore in rupee term loans from a consortium including NaBFID, IIFCL, ICICI Bank, UCO Bank, and Punjab & Sind Bank.
- A ₹2,000 crore working capital demand loan from Bank of Baroda.
- Fund-based and non-fund-based credit facilities totaling ₹400 crore from ICICI Bank.
The term loan proceeds will be utilized for refinancing existing project loans, while the working capital facilities will assist in managing cash flow mismatches related to the project.
Financial Restructuring Goals
Kaushal emphasized that the financial restructuring aims to enhance the economics of the Rajasthan refinery, which HPCL plans to bring to full operating capacity by December. The company is also focused on stabilizing its other complex refining assets amid fluctuating crude prices and rising losses on domestic cooking gas.
