Shares of Indian Oil Corporation (IOC) fell nearly 1% in opening trade on Thursday, a day after the board of the oil market company approved setting up of a petrochemical complex at Paradip, Odisha. The oil major will invest ₹61,077 crore to set up this mega project, which is touted to be the largest-ever investment by the company at a single location.

“The Indian Oil Board has accorded ‘Stage-I’ approval for setting up Paradip Petrochemical Complex at Paradip, Odisha at an estimated cost of ₹61,077 crore. This mega project will be largest-ever investment of Indian Oil at a single location,” the oil company said in a release on Wednesday.

The move is being seen as part of the company’s transition plan to boost petrochemical intensity to help protect against volatility. Petrochemical intensity refers to the percentage of crude oil that is converted directly into chemicals that are used to make plastic and other material.

As per the release, the petrochemical complex will have a cracker unit along with downstream process units for producing several petrochemical products including Poly propylene (PP), High Density Polyethylene (HDPE), Linear Low-Density Polyethylene (LLDPE), Poly Vinyl Chloride (PVC) etc. It will also facilitate production of niche chemicals and petrochemicals like Phenol and Iso Propyl Alcohol.  

Shrikant Madhav Vaidya, Chairman, Indian Oil said, “This mega project is aligned with Hon’ble Prime Minister Narendra Modi’s vision of Purvodaya that is sure to accelerate the development trajectory and fuel prosperity in Eastern India. This cutting-edge, state-of-the-art petrochemical complex will undoubtedly be transformative in its impact, significantly advancing the Aatmanirbhar Bharat initiative.”

The release stated the project will improve the petrochemical intensity index of Indian Oil. “It shall be a growth driver in making the company a major player in the petrochemical industry, while strengthening India’s self-reliance in the petrochemical sector,” it said. 

This project will catalyse the growth of PCPIR and plastic park at Paradip. On commissioning of this project, domestically available petrochemicals are expected to provide feed and vitalise industrial growth in key downstream industries like plastic, pharma, agrochemical, personal care, paints etc, it added.

Following the announcement, shares of IOCL opened marginally lower at ₹79.11 against the previous closing price of ₹79.58 on the BSE. The stock declined as much as 0.7% to hit a low of ₹79.05, while the market capitalisation slipped to ₹1.19 lakh crore.

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