According to two sources, India intends to ask state-run Oil and Natural Gas Corp to explore issuing a rights issue to help fund green projects at Hindustan Petroleum Corp's refining unit, which could raise $1.9 billion. The remarks come after India's finance minister announced earlier this year a proposal to offer equity worth 300 billion rupees ($3.6 billion) to assist large state oil refiners in transitioning to cleaner energy.

According to people with firsthand knowledge of the situation, the government is examining options for HPCL, including immediately issuing loans at discounted rates. They wanted to remain anonymous since they were not authorized to speak to the media. According to one of the sources, the oil ministry is expecting a response from the finance ministry on the intention for ONGC to conduct a rights issue.

An ONGC rights offer may be worth around 155 billion Indian rupees ($1.86 billion) based on past rights issues announced by two other state refiners, according to Reuters calculations. In 2018, New Delhi sold its 51.1% share in HPCL to ONGC, transforming the company into a subsidiary of India's largest energy exploration company. The government has a 58.93% interest in ONGC. Initially, the government planned to inject cash into HPCL through the issue of preferential shares, but this would risk reducing ONGC's ownership below 50% and eliminating the government's indirect control of HPCL, according to one of the people. Requests for comment were not immediately responded to by ONGC, HPCL, or the oil and finance ministries.

Indian Oil Corp and Bharat Petroleum Corp, India's other major state refiners, have announced intentions to issue rights worth 220 billion and 180 billion rupees, respectively. The government holds 51.5% of IOC and 52.98% of BPCL.

However, a lack of clarity from the government on how to inject funds into HPCL has caused the launch of rights issues for IOC and BPCL to be postponed, according to sources. According to sources, these concerns were previously scheduled for the end of October. The three refiners intend to invest 3.5 trillion to 4 trillion rupees to achieve net-zero emissions by 2040.