Nayara Energy: A Comprehensive Analysis by UnlistedZone provides an overview of the company, from its history to its financial performance and future plans.
**History of Nayara Energy**
The foundation for Nayara Energy, previously Essar Oil Limited, was laid in 1996 with construction beginning for the Vadinar refinery. The project faced environmental and financial obstacles, causing delays. Work resumed in 2005, and the refinery was completed in 2006 with a total investment of ₹18,711 crore ($2.14 billion). Commercial production started in 2008. Rosneft and Trafigura UCP acquired the company in 2017, and it was rebranded as Nayara Energy. The name "Nayara" combines "Naya" (new) and "Era."
**Company Overview**
Nayara Energy is a major player in the refining and marketing of petroleum and petrochemical products, serving domestic and international markets. The company focuses on crude oil refining, fuel retailing, and export sales. Nayara has also diversified into petrochemicals to enhance revenue streams and improve profit margins. Key information includes: Vadinar, Gujarat, is the refinery location, India's second-largest single-site refinery; capacity is 20 million metric tons per annum (MMTPA); acquired by Rosneft and Trafigura UCP in 2017; it has over 6,600 fuel stations in India.
**New Initiatives and Expansion Plans**
Nayara Energy has several expansion plans: A Front-End Engineering Design (FEED) study for Phase 2 of its petrochemical project has been initiated, including the development of a 1.2 MMTPA steam cracker unit; an ambitious plan to expand its fuel station network to 10,000 outlets by 2030; Nayara Energy is venturing into biofuels, setting up ethanol plants with an initial capacity of 200 KLPD in Andhra Pradesh and Madhya Pradesh, aiming for five plants by 2030 to support India's ethanol blending program; and to enhance its international presence, Nayara Energy has established a trading hub in Singapore.
**Supply Chain Analysis**
Nayara Energy imports crude oil globally, focusing on heavy and ultra-heavy grades. The crude mix includes Ratawi (31.5%), Maya (27%), Arab Light (13.5%), Mangala (10%), Arab Heavy (9%), and Doba (9%). Planned expansion includes Cabinda (17.4%) and Escalante (5.7%). Refinery operations include a Nelson Complexity Index of 11.8, a port facility with 27 MMTPA crude and 14 MMTPA product handling capacity, a 1,010 MW captive power plant, and seawater desalination. Nayara Energy produces a variety of petroleum products including fuels (petrol, diesel, jet fuel, LPG), petrochemicals (polyethylene, polypropylene, paraxylene, purified terephthalic acid (PTA)), and by-products (sulfur and petroleum coke).
**Expansion and Modernization**
Nayara Energy is expanding its refinery capacity from 20 MMTPA to 26 MMTPA. Investment is $20 billion for a 10.75 MMTPA petrochemical complex. This expansion is expected to create 12,000 construction jobs and 2,000 operational jobs. The project cost is estimated at ₹1.42 lakh crore (~$20 billion).
**Financial Performance**
In FY 2024, total revenue was ₹1,56,442 Cr., and market cap was ₹186,320 Cr. The P/E ratio was 15.12, P/B ratio was 4.28, and there were 149 Cr. shares. Retained earnings were ₹348,56 Cr., total equity was ₹419,83 Cr., and term loans were ₹85,63 Cr. Revenue breakdown includes export sales (₹40,416 Cr. in 2024), domestic oil marketing companies (₹45,534 Cr. in 2024), retail outlets (₹58,274 Cr. in 2024), and other sources (₹12,218 Cr. in 2024).
**Shareholding Pattern and Peer Comparison**
Rosneft Singapore Pte. Ltd. and Kesani Enterprise Company Limited each own 49.13% of Nayara Energy, with the remaining shares held by public and other investors. Nayara Energy's performance is compared to IOCL, BPCL, HPCL, and Reliance Industries in terms of crude oil purchased (MMT), revenue (FY 2023-24), PAT (₹Cr.), and fuel outlets.
**Why Nayara Energy Has a High OPM?**
Nayara Energy has a high OPM due to efficient crude processing (101.6% capacity utilization), a high-value product mix (increased production of diesel, jet fuel, and gasoline), retail expansion (sales through 6,600+ outlets), debt reduction (improved working capital and lower debt-to-EBITDA ratio), and favorable market conditions (benefit from discounted Russian crude imports).
**Conclusion**
Nayara Energy has positioned itself as a leading player in India's refining and fuel retail industry. Its continued expansion into petrochemicals, fuel retailing, and ethanol production highlights its ambition to grow and adapt to changing market dynamics. With strong financials, operational efficiency, and strategic partnerships, Nayara Energy is well-positioned for long-term growth and profitability.
