February, 13 (LBO) – Lanka IOC, a unit of the Indian Oil Corporation, is poised to grab more market share from the country’s dominant state-owned petroleum distributor and gain from a leaner cost base, an equities research house has said.
LIOC shares slid below 30 rupees last year after disputed subsidy claims hit the firm’s cash-flows forcing it to stop distribution. The company also reported the largest ever loss in the Colombo Stock Exchange after making a provision for unpaid dues.
Lanka IOC closed up 1.75 at 35.75 Tuesday. With the government apparently abandoning plans to bring in a third player the field was clear for LIOC to widen its market share, Asia Securities Research said in a report.
LIOC had initially started by buying over 100 filling stations previously owned by state-owned Ceylon Petroleum Corporation (CPC) and had set up another 55 dealerships.
Another 100 filling stations and a third share of the common infrastructure firm were reserved for a third player in the original de-regulation plan, which ran into opposition.
Asia Securities says LIOC was not allowed to start company-owned dealerships under the regulatory framework in the initial stages.
“From 2007 onwards regulator imposed res