Plans of preferential issue to promoters further fuel Essar Oil

Essar Oil surged 20.94% to Rs 146.45 at 13:22 IST after its announcement that a board meet will held on Friday, 16 November 2007, to consider further issue of securities to promoters.

Essar Oil stock had risen a staggering 34% on Wednesday, 14 November 2007.

Meanwhile, the BSE Sensex was down 101.34 points, or 0.52%, to 19,856.04 amid persistent worry that more fallout from the US housing downturn and US credit crunch lies ahead.

On BSE, 1.06 crore shares changed hands in the counter. The stock had an average daily volume of 15.21 lakh shares on BSE in past one quarter.

The stock hit a high of Rs 157.70 which is record high for the scrip. It hit a low of 132 so far during the day. The stock 52 week low of Rs 41.05 on 13 December 2006.

The scrip of mid-cap oil exploration firm outperformed the market over the past one month till 14 November 2007, surging 115.14% compared to the Sensex's return of 8.2%. It also outperformed over the past one quarter, rising 129.22% to Sensex's gain of 32.85%.

Essar Oil's current equity share capital is Rs 1,201.45 crore. Face value per share is Rs 10.

The issue to promoters will include issue of securities and warrants on a preferential basis. The company made this announcement after the market hours on Wednesday, 14 November 2007.

Essar Oil reported a net loss of Rs 13.98 crore in Q2 September 2007 as against net loss of Rs 18.07 crore in Q2 September 2006. Net sales jumped 543.80% to Rs 176.60 crore in Q2 September 2007 over Q2 September 2006.

Essar Oil (EOL) has three main divisions -- energy, offshore exploration and petroleum products. Its offshore division undertakes construction related to the oil industry for extraction of oil and/or gas reserves.