Content

  1. 1Nayara Energy Essentials
    1. 1.1 Nayara Energy ISIN
    2. 1.2 Nayara Energy Face Value
    3. 1.3 Nayara Energy Total Share
    4. 1.4 Nayara Energy Total Income
    5. 1.5 Nayara Energy Profit After Tax
    6. 1.6 Nayara Energy Promoter Holding
    7. 1.7 Nayara Energy EPS
    8. 1.8 Nayara Energy P/E
    9. 1.9 Nayara Energy P/B
    10. 2.0 Nayara Energy Market Capitalisation
    11. 2.1 Nayara Energy Enterprise Value
    12. 2.2 Nayara Energy Book Value
    13. 2.3 Nayara Energy Intrinsic Value
    14. 2.4 Nayara Energy Earnings Yield
    15. 2.5 Nayara Energy Dividend Yield
    16. 2.6 Nayara Energy Sector
    17. 2.7 Nayara Energy Sub-sector
    18. 2.8 Nayara Energy Category
    19. 2.9 Nayara Energy Cashflow - Operations
    20. 3.0 Nayara Energy Cashflow - Financing
  2. 2Nayara Energy Growth
    1. 2.1 Nayara Energy Compounded Sales Growth
    2. 2.2 Nayara Energy Compounded Profit Growth
    3. 2.3 Nayara Energy Return On Equity
  3. 3 About Nayara Energy
  4. 4 Nayara Energy IPO Details
  5. 5 Nayara Energy Funding
  6. 6 Nayara Energy Merger & Acquisition
    1. 6.1 Nayara Energy Merger
    2. 6.2 Nayara Energy Acquisition
    3. 6.3 Nayara Energy Investments
  7. 7 Nayara Energy Subsidiaries
  8. 8 Nayara Energy Business Model
  9. 9 Nayara Energy Revenue Segmentation
  10. 10 Nayara Energy Product & Services
  11. 11 Nayara Energy Assets
  12. 12 Nayara Energy Industry Overview
    1. 12.1 Nayara Energy Industry Statistics
    2. 12.2 Nayara Energy Future Prospects
    3. 12.3 Nayara Energy Government Initiatives
  13. 13 Nayara Energy Awards & Achievements
  14. 14 Nayara Energy SWOT
    1. 14.1 Nayara Energy Strengths
    2. 14.2 Nayara Energy Shortcomings
    3. 14.3 Nayara Energy Opportunities
    4. 14.4 Nayara Energy Government Threats
  15. 15 Nayara Energy Rating
  16. 16 Nayara Energy Detail Info

Nayara Energy Essentials

Nayara Energy Limited engages in refining of crude oil and marketing of petroleum products in India, Singapore, United Arab Emirates, South Africa, etc. The company markets Petcock, Sulphur, high speed diesel, high flash high speed diesel, light diesel oil, bitumen, and fly ash. If you want to buy sell Nayara Energy unlisted shares read all info and find upcoming IPO date, Pre share price, Company review etc.

ISIN

INE011A01019

Face Value

₹10.00

Total Share

1,49,05,61,155

Total Income

₹1,19,853.70 Cr

Profit After Tax

₹921.00 Cr

EPS

₹6.18

P/E

33.98

P/B

1.48

Market Capitalisation

₹31,301.78 Cr

Enterprise Value

₹47,330.48 Cr

Book Value

₹141.89

Intrinsic Value

₹212.16

Earnings Yield

2.94 %

Sector

Energy

Sub-sector

Oil & Gas - Refinery & Marketing

Category

Delisted

Cashflow - Operations

₹1,352.60 Cr

Cashflow - Financing

-₹1,470.60 Cr

Nayara Energy Growth

Compounded Sales Growth

  • 36.79%

    1 Year

  • 8.76%

    4 Year

  • 11.47%

    6 Year

Pro Only

Compounded Profit Growth

  • 101.00%

    1 Year

  • 10.18%

    3 Year

  • -5.35%

    6 Year

Pro Only

Return On Equity

  • 4.35%

    2022

  • 13.01%

    2020

  • -6.37%

    2017

Pro Only

About Nayara Energy

  • Nayara Energy Ltd. ("Nayara Energy") is engaged in the refining of crude oil and marketing of petroleum products in India, Singapore, Mozambique, the United Arab Emirates, South Africa, and internationally. The company markets petcoke, sulphur, high-speed diesel, high flash high-speed diesel, light diesel oil, bitumen, fly ash etc. 
  • The company owns and operates India’s second largest single-site, state-of-the-art and one of the country's most modern and complex refineries, with a capacity of 20MMTPA and a high complexity index of 11.8 and constitutes approximately 8% of the Indian refinery capacity.
  • The company is present in the entire hydrocarbon value chain from refining to marketing. Now it is gearing up to deliver crude to chemicals too. It is the fastest-growing pan-India fuel retail network. In FY22 it added 598 new outlets and the total no. of outlets at the end of the year was 6568.
  • In 2016, Nayara Energy was acquired by Rosneft, the world’s largest public oil and gas company by liquid hydrocarbon production and reserves and an investment consortium led by global commodity trading firm Trafigura & UCP Investment Group. As of Jan 2023, Trafigura's entire stake has been acquired by Hara Capital Sarl of Italy-based Marretarra Group. 
  • It was a publicly traded company until it was taken private in a leveraged buyout which closed on December 30, 2015. It was delisted valued at ₹380 bn. 
  • The company was formerly known as Essar Oil Limited and changed its name to Nayara Energy Limited in May 2018. Nayara Energy Limited was incorporated in 1989 and is based in Mumbai, India.

  • Nayara Energy IPO Details

Right now Company has not filed any DRHP

  • Nayara Energy Merger & Acquisition

Merger

  • On December 14, 2020, Vadinar Oil Terminal Ltd. got merged with the company.  As an integral part of the amalgmation, the non-controlling shareholders of VOTL who were resident in India were issued Non-Convertible debentures (NCDs) having fair value, face value and paid up amount of Rs. 350 each bearing coupon rate of 8% per annum for every 1 fully paid equity share of VOTL and those shareholders who were non-resident in India were to be paid Rs. 350 in cash for each 1 fully paid equity share of VOTL.

Acquisition

  • On January 11, 2023, Trafigura Group Pte Ltd has today announced the completion of the sale of its 24.5% indirect minority interest in Nayara Energy Limited to Hara Capital Sarl, a wholly owned subsidiary of Mareterra Group Holding (formerly Genera Group Holding S.p.A.), an energy investment group with a focus on energy and carbon efficiency infrastructure. As per market sources Trafigura got book value for its stake, which was carried in its last annual report at $165.9 million and was classified as "held for sale", in its financial reports since 2021.
  • On August 21, 2017, Petrol Complex Pte. Ltd., United Capital Partners and Trafigura Group Pte. Ltd. completed the acquisition of a 98.26% stake in Nayara Energy Ltd. (Essar Oil Ltd.) from Essar Energy Holdings Ltd. and Oil Bidco (Mauritius) Ltd. for approximately Rs. 86,000 crores. Petrol Complex Pte. Ltd. and the consortium of United Capital Partners and Trafigura Group Pte. Ltd. acquired a 49.13% stake each in Nayara Energy Ltd. (previously known as Essar Oil Ltd). 
  • On May 29, 2017, Nayara Energy Ltd. (previously known as Essar Oil Ltd.) completed the acquisition of the remaining 73.99% stake in Vadinar Power Company Ltd. from Essar Power Ltd. Essar Oil Ltd. will acquire 293 million equity shares and 391.99 million convertible participating preference shares for an amount not exceeding INR 2.1 billion. 
  • On December 21, 2015, Essar Energy Holdings Ltd. completed the acquisition of an additional 6.96% stake in Nayara Energy Ltd. (previously known as Essar Oil Ltd.) from all public shareholders for Rs. 2650 crores. The bid price has been increased to INR 262.8 per share. BDO India LLP acted as Accountant for Essar Energy Holdings Ltd., Axis Capital Ltd. and JM Financial Institutional Securities Ltd. acted as Financial Advisor for Essar Energy Holdings Ltd., and Link Intime India Pvt. Ltd. acted as Transfer Agent/Registrar for Essar Energy Holdings Ltd.
  • On June 26, 2014, Essar Energy Holdings Ltd. acquired 9.46% stake in Nayara Energy Ltd. (previously known as Essar Oil Ltd.) for Rs. 1480 crores. MZSK and Associates acted as an auditor to Essar Energy Holdings Ltd. in the transaction. The floor price has been set as INR 108.18 per share.
  • On May 23, 2013, Essar Energy Holdings Ltd. completed the acquisition of an additional 2.41% stake in Nayara Energy Ltd. (previously known as Essar Oil Ltd.) from Imperial Consultants and Securities Pvt. Ltd for INR 2.7 billion. Essar Energy acquired 32.9 million shares of Nayara Energy for INR 81.11 each.
  • Nayara Energy Subsidiaries

  • Nayara Energy Singapore Pte Ltd.- Engaged in wholesale trading and allied activities in the oil and commodities sector. 
  • Coviva Energy Terminals Ltd.- Developer of single-point mooring and associated marine infrastructure facilities

Nayara Energy Business Model

  • Synopsis: Owing to a dearth in domestic production private as well as public refiners (PSUs) heavily depend on imports for sourcing raw materials. The parent entities viz. Rosneft Group (A state-owned Russian oil giant) and Trafigura Group  (a Swiss-based commodity trader) under their respective contracts with the Group have the right to make the first offer for both sale of raw materials and the purchase of finished products. In FY22 revenue from the sale of products through RPT amounted to ₹ 6,787.8 Cr. (5.6% of revenue) most of which (86%) was with Trafigura. Further raw materials worth ₹ 6,492.7 (7.7% of COGS) were acquired from the same of which Rosneft to Trafigura share was 4:1 (approx). Rosneft Group and Trafigura Group also have been advising the Group on regular basis and providing insight into the market dynamics to help strategise the crude procurement and sale of finished products. In consideration of the same, the company pays a fee of $ 0.1 for every barrel of raw materials purchased and finished products exported.
  • Winds of change: On January 11, 2023, Trafigura Group Pte Ltd announced the completion of the sale of its 24.5% indirect minority interest in Nayara Energy Limited to Hara Capital Sarl, a wholly owned subsidiary of Mareterra Group Holding (formerly Genera Group Holding S.p.A.), an energy investment group with a focus on energy and carbon efficiency infrastructure. As per market sources Trafigura got book value for its stake, which was carried in its last annual report at $165.9 million and was classified as "held for sale", in its financial reports since 2021. The move comes at a time when numerous of the biggest trading companies in the globe have started distancing themselves from Rosneft and other Russian corporations due to the Russo-Ukranian crisis. Henceforth most OMO (Open-Market Operations) by Nayara is expected to be conducted through its international launchpad Nayara Energy Singapore Pte Ltd.  
  • Coviva Energy Terminals Ltd. - Developer of single-point mooring and associated marine liquid terminal facilities infrastructure facilities.
  • Nayara Energy Revenue Segmentation

  • Sale of manufactured products
  • Sale of traded goods
  • Other operational income
  • Nayara Energy Product & Services

  • Refinery: The Refinery has an annual capacity of 20 MT (million tonnes) or 405000 barrels per day. It is capable of processing some of the toughest crudes and yet produces high-quality Bharat Stage (BS-VI) compliant fuels that meet international standards. Retail: With a pan – Indian network of fully automated 6,568 retail outlets as on 31st March 2022 with quality Euro IV and Euro VI grade products. It can now produce high-quality Bharat Stage (BS-VI) compliant fuels that meet international standards.


  • Retail: With a pan – Indian network of fully automated 6568 retail outlets as on 31st March 2022, Nayara Energy fuel stations endeavours to reach the length and breadth of the country covering national and state highways as well as rural areas.

  • Nayara Energy Assets

Assets as on 31.03.2022

Tangible Assets

ParticularsAmount (in Rs. Cr.)
Land5286.5
Buildings1142.0
Plant and Machinery35301.2
Furniture and Fixtures11.9
Office Equipment's109.3
Vehicles5.3


Intangible Assets

ParticularsAmount (in Rs. Cr.)
Goodwill10818.4
Other Intangible Assets28.0


  • Nayara Energy Industry Overview

Industry Statistics

Economic Overview:

  • According to the most recent IMF projections, the world economy would expand by 3.6% in 2022 and 2023. The Indian economy expanded by a robust 8.7% in the financial year 2021–2022, as opposed to a decrease of 6.6% in the financial year 2020–2021, according to the Central Statistical Office (CSO), indicating that pre-pandemic levels of economic activity have been surpassed in India. 
  • However, in the latter half of the FY 2021-2022, India’s growth prediction for 2022–23 (FY23) was reduced by 140 basis points to 6.8% by the International Monetary Fund (IMF), which cited less favourable external conditions and the central bank’s quickening of policy tightening. 2022 Projected Consumer Prices remained at 6.9%.
  • The Repo rate was hiked in a phased manner to 6.25% (December 2022) by the RBI adapting to the hawkish needs of the market and to counter rising inflation which cooled off to 5.88% (retail CPI) by November. An impending revival in demand, positive consumption pattern and rising disposable income makes India the most sought-after investment destination.
  • In FY22, OECD commercial oil stocks stood at 389 million barrels (mb) lower than the same period in FY21 and also below the FY19 average. The oil market's rebalancing was supported by the coordinated supply management strategy of OPEC+ and the revival of petroleum consumption faster than production. Currently, OPEC+ contributes more than 57% of world crude production and recently (November 2022) it announced a production cut of 2 million barrels.
  • Production of petroleum products increased by 5.7% during April-November 2022 as compared to the corresponding period of the previous year. Crude oil imports increased by 11.6% during April-November 2022 and 3.1% during November 2022 as compared to the corresponding period of the previous year. Crude oil processing increased by 6.8 % during April-November 2022 as compared to the same period, FY21.


Industry Overview:

  • Petroleum production means the production of crude oil or other forms of crude oil, as well as the production of petroleum products from purchased/mined items. Refining means the cracking, distillation, separation, conversion, upgrading and finishing of refined petroleum or petroleum products. Marketing means the distribution, transfer or sale of petroleum and petroleum products for wholesale or retail purposes.
  • The oil and gas industry is usually divided into three major sectors: upstream, midstream, and downstream. The downstream sector is the refining of petroleum crude oil and the processing and purifying of raw natural as well as the marketing and distribution of products derived from crude oil and natural gas. The downstream sector reaches consumers through products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oils, lubricants, waxes, asphalt, natural gas, and liquefied petroleum gas (LPG) as well as naphtha and hundreds of petrochemicals.
  • Nayara Energy is engaged in refining imported crude from CIS (Commonwealth of Independent States) countries and selling a varied range of products including a crude basket to 125+ crude grades and crude distillates like MFO (Marine Fuel Oil) and Reformate, naphtha, Motor Spirit (MS), Gasoil, Ultra Low Sulfur Diesel (ULSD), MS, High-Density Diesel (HDD) and Light Diesel Oil (LDO) through the retail channel (6500+ pumps) and export of the same to Asia, Middle-east, Africa and others. In FY22, the company Safely handled 5,000 vessels and 390 MMT of crude at the port. It further supplies natural gas at its pumps procured through PMS (Parallel Marketing System).

 

Classification:

  • Crude oil is the primary input cost for a refinery (90% to 95% of the total cost of refining). Refineries process the crude oil purchased into various value-added products, which in turn are classified as light, middle and heavy distillates. A refinery tries to optimize its capacity to produce more remunerative distillates to boost margins (petrol and diesel).


  • During the FY2022, the Refinery processed 20.16 million metric tonnes (MMT) of crude, achieving approx. 101% capacity utilisation. It processed 84% of Heavy and Ultra Heavy Crudes and produced 87% of high-margin distillates. Institutional Business continued to contribute significantly to the company's performance driving the growth objective for high-margin products, i.e. HSD, LDO and MTO. Despite the pandemic affecting industrial activities, Institutional Business registered its highest-ever sale of HSD and better than planned delivery for Bitumen. The company was able to scale up both HSD & LDO business with strong growth of 9% and 61%, respectively, viz-a-viz industry growth of 10% and 20%, respectively, by entering into new segments and geographies. NPIs like MTO was successfully launched in June 2021 and we could establish our product with major paint companies achieving a market share of 8%



Market Dynamics:

  • India is the world's third largest oil importing and consuming nation behind the USA and China. For 2023, the Organisation of Petroleum Exporting Countries (OPEC) projected growth of 4.67% in India's demand to 5.38%. GOI-controlled PSUs (Public Service Union) produce 77% of national production with 65.1% by ONGC (FY22). The rest of the 22.6% of production is credited to PSCs (Public Sharing Contracts).


  • Due to low volumes of production compared to high demand, the Indian Oil & petroleum products industry is heavily dependent on imports and thus exposed to global price volatility. Further the artificial price control by GOI by implementing policy changes to establish price stability in domestic markets often squeezes margins from private retail marketers. Thus private refineries like Reliance and Nayara prefer to sell the bulk of their output through exports before catering to domestic retail. 

  • Imports made due to deficit in production viz. LPG and Lubes/LOBS accounted for 48.5% share of total POL products import during April-November 2022 as compared to 50.8% during April-November 2021. Imports of petcoke accounted for 13.3% of the total POL imports during April-November 2022. The entire quantity was imported by private importers. 


 

Catalyst: Oil prices rose significantly as the Russia-Ukraine conflict dragged on, after Russia's invasion of Ukraine began in the last week of February 2022 and supply concerns weighing on the global oil market. The monthly average price of the Indian basket of crude oil rose to $112.87/ bbl at the end of the financial year 2021-22 in March 2022 from $63.40/bbl at the beginning of April 2021 and finally averaging $87.55/bbl November 2022. European Union and G7 countries have imposed a price cap of $60/bbl on crude originating hence from Russia from 05, December 2022. Europe's energy system faces an unprecedented crisis. Supplies of Russian gas—critical for heating, industrial processes, and power—have been cut by more than 80% this year. Wholesale prices of electricity and gas have surged as much as 15-fold since early 2021, with severe effects on households and businesses. India has ramped up its oil imports from Russia, amid fears of a sharp price increase from December.

 


Trickle-Down Effect: Reliance Industries and Nayara Energy are among the Asian refiners that produce winter-specification diesel for the European Union, therefore the ongoing energy crisis in Europe is anticipated to be advantageous for them. Since state-owned oil businesses do not export, private refineries, which are the nation's top exporters of diesel, have an edge. According to oil analysts at Refinitiv, since the start of the Ukrainian conflict, Reliance and Nayara have purchased 2.82 million tonnes of Russian oil per month between March and September, which is almost ten times as much as they did before the invasion. In response to the invasion, Indian refiners (RIL & Nayara) increased their exports to Europe, averaging 7,30,000 tonnes per month, or 21% of their total exports of 2.64 million tonnes per month, which peaked at 1.1 million tonnes in March, according to the analysts. This is a significant increase from the pre-invasion period average of 5,70,000 tonnes per month. Diesel supplies from Asia to Europe have been consistent since the Ukraine crisis broke out in February, averaging 9,50,000 tonnes per month, a significant increase from the pre-invasion peak of 1 million tonnes per month. In August this hit an 11-month high of 1.64 million tonnes. 



Reaping on Windfall gains? Russia became the 7th largest trade partner of India and its top crude exporter in December. Private Indian refineries (RIL & Nayara) accounted for 69% of the imports. As of January 2023, India has been buying more Russian crude and condensate. Between late April and the end of December 2022, Russian crude imports were equivalent to around 64,000 b/d over the period. Arctic Varandey Blend is expected to account for 13% of total Russian imports in January, up from zero in November. India is also buying other Arctic grades from Russia, including Arco and Novy Port Light. Top supplier Russia ships record 1.17 million b/d of crude to India in December 2022. While the export of crude and energy to the US has increased, there has been a considerable decrease in Britain, Spain and Romania. Meanwhile, countries including Portugal, Belgium, and Italy have increased their imports by 1600, 535, and 17 times respectively. Exports to the Netherlands also saw a 45% increase compared to October.



Hindrance: GOI adhocism:

  • The fuel retailing business in India has seen cyclical changes that have more to do with politics-driven policy over the past two decades than the balance of supply and demand. These include introducing market-linked fuel pricing twice and reverting to an administered mechanism twice. In the early quarters of FY23, the country faced fuel shortages in various parts induced by rising global crude prices. Private refineries reduced supplies to dealers and maintained prices higher to deter customers in order to minimize their losses amidst margin squeeze. The action was taken when the government placed all gas stations under the Universal Service Obligation (USO), which required that they keep supplies at fair prices during their designated operating hours. Estimated GOI losses arising out of the price freeze on petrol and diesel are pegged at ₹ 45,000 Cr.
  • To deal with the fuel crisis, the GOI deregulated sale of domestically-produced crude oil; and imposed a cess, or windfall tax, of ₹23,250/tonne on crude oil and a special additional excise duty (SAED) of ₹ 6 per litre and ₹ 13 per litre on exports of petrol and diesel respectively. On July 20, the SAED (Special Added Excise Duty) on petrol was removed and on diesel was cut to Rs 11 per litre. On one hand, it expects exploration and production (E&P) companies to increase the domestic production of crude oil and reduce the import of costly oil from global suppliers, while on the other, expects the companies to curb fuel shortages in the domestic market. According to market estimates on a net-net basis, actual revenue gain from windfall tax could be limited to ₹ 25,000 Cr. This is because the government is likely to lose out on corporate tax collections from oil companies, the largest contributor to corporate taxes. 


 

Key Drivers

  • Cheap sourcing of raw materials: Procurement of Russian crude at well below the price cap of $60 and significantly below the global price of $80 allows for good margins.
  • Reduction in windfall tax: On July 1, 2022, the GOI imposed windfall gain taxes on the production and export of crude and its distillates (petrol, diesel and aviation turbine fuel (ATF)) worth ₹ 23,250/tonne. But cooling off of global prices and changing geo-political scenario enabled stepwise reduction of tax as the year rolled. By December 2022, the government estimate of fiscal earnings was only ₹ 35,000 Cr against the predicted ₹ 94,800 Cr. Windfall tax on crude was further cut to ₹ 1700/tonne from the prevalent ₹ 4900/tonne by GOI notification on December 15, 2022. 
  • Growth in the Plastics market: The company laid the foundation stone for the petrochemical expansion project for the 450 KTPA Polypropylene Plant as a part of its backward diversification to alternate sustainable revenue streams. The polymer is derived from propylene gas and other by-products of crude distillation like naphtha. Optimization of the sales mix with the inclusion of high-demand 'On-Purpose Product' (OPP) from common throughput is expected to benefit the Company's profit margins and provide a hedge against fortuitous economic extremes. Polypropylene (PP) contributed to the largest share of Indian plastic demand during FY22 at 24% or 6.1 million tons.