Despite some heavy selling from domestic institutions, the IOC counter is trading strong today, and the market's reckoning is that the company will turn out excellent results when it declares them on 23 July 2003. Players also expect a huge dividend of around Rs 40 per share (400% on a face value of Rs 10 ) for FY 2002-03.

Earlier, the company recommended a 1:2 bonus issue of equity shares to shareholders - one new share for every two existing equity shares. When the bonus issue is concluded, the company's equity base will increase to Rs 1,168.02 crore from the current Rs 778.68 crore.

Fundamentally, IOC looks very strong. It has 10 refineries and 22,000 petrol pumps, representing 42% of the total refining capacity and 53% of petroleum product sales in India. IOC owns 6,523 km of crude and product pipelines in India.

IOC's huge investment of Rs 4,280 crore in shares of oil companies is also expected to earn it huge dividends. The company has invested in shares of ONGC, Gas Authority of India (GAIL), IBP, Chennai Petroleum and Bongaigaon Refinery at historically low prices. All these companies have posted record profits and announced fat dividends.

For the third quarter ended 31 December 2002, IOC recorded a 37% increase in net profit to Rs 776.56 crore (Rs 567.79 crore) on a 10% rise in net sales to Rs 31,212.23 crore (Rs 28,416.87 crore).

As on 31 March 2003, the Government of India held 82.03% equity stake in IOC, while the public and institutions held 3.70% and 4.94% respectively.