Nayara Energy Unlisted Shares

Nayara Energy Limited - Fuelling India, Securing Tomorrow

Nayara Energy Limited is a key contributor to India’s energy sector, defining itself as a major downstream energy and petrochemicals company. The Group’s activities are centered on robust operations across the hydrocarbon value chain, including crude oil refining, marketing of petroleum products in domestic and overseas markets, and providing related port and terminal services.

The company views its role as central to fortifying India’s energy security and supporting the nation’s growth trajectory.

1. Core Business Description and Products

Nayara Energy’s business model leverages highly complex assets to maximize yield and efficiency in a volatile global energy landscape.

A. Refining Operations:

• The company operates India’s second largest single-site refinery located in Vadinar, Gujarat.
• The Vadinar refinery has a capacity of 20 MMTPA (Million Metric Tonnes Per Annum) and is recognized as one of the world's most complex refineries, operating with a Nelson Complexity Index of 11.8.
• Operational highlights for FY 24-25 include an exceptional capacity utilization rate of 102.3%, achieving a record throughput of 20.49 MMT of crude oil.
• Refinery processes prioritized economically advantageous crude grades, managing to process 96.1% ultra-heavy and heavy crude oils.
• The production focus resulted in maximizing the yield of high-margin light and middle distillates at 87%.

B. Marketing and Retail Network:

• Nayara Energy operates India’s largest private fuel station network, serving as critical touchpoints for mobility and commerce across the country.
• As of March 31, 2025, the total retail network comprised 6,683 operational outlets across the country, representing about 7% of India’s retail petrol pump network.
• The Institutional Business segment remains focused on maximizing volume and profitability across its ‘On Purpose’ product portfolio, which includes HSD, MTO, and Polymer Modified Bitumen (PMB).

C. Petrochemicals Foray:

• The company has embarked on a crude-to-chemicals journey as a key strategy to future-proof its business.
• This strategic step includes the commissioning of a 450 KTPA Polypropylene (PP) plant in Vadinar. This downstream integration provides a natural hedge against the volatility inherent in the refining industry.

2. Group Structure and Subsidiaries

Nayara Energy Limited does not have a holding company. The company operates with two wholly-owned subsidiaries included in the consolidated financial statements:

3. Revenue Sources and Financial Performance (Consolidated FY 2024-25)

The Group delivered a consolidated total income of ₹ 1,50,324.4 Crore (₹ 1,505,806 million Standalone) for the fiscal year ended March 31, 2025. The primary revenue sources reflect its core refining and marketing activities:

A. Key Financial Results (₹ in Crore)

• Total Consolidated Income: ₹ 1,50,324.4 Crore.
• Revenue from Operations: ₹ 1,49,217.4 Crore.
• EBIDTA (Earnings before interest, taxes, depreciation, and amortization): ₹ 12,243.6 Crore (Standalone).
• Profit After Tax (PAT): ₹ 6,079.5 Crore (Consolidated).

B. Revenue by Customer Segment (₹ in Crore)

Revenue from contracts with customers totaled ₹ 1,50,317.0 Crore. The major contributions were segregated as follows:

1. Retail outlets: ₹ 62,622.3 Crore (Highest sales volume ever achieved through retail outlets).
2. Export sales: ₹ 36,994.5 Crore.
3. Domestic Oil Marketing Companies (OMCs): ₹ 36,750.0 Crore.
4. Institutional business and petrochemicals: ₹ 13,950.2 Crore.

C. Other Income

Other income streams contributed ₹ 1,107.0 Crore (₹ 11,070 million Consolidated), primarily from interest income (₹ 660.4 Crore) and various net gains and non-operating income.

4. Recent Developments and Strategic Highlights (FY 2024-25)

The year was characterized by strategic investments in growth and operational resilience amidst significant external challenges.

Operational and Integration Milestones

• Highest Production Records: Achieved the highest-ever annual production of Motor Spirit (MS) at 4.1 MMT and High Speed Diesel (HSD) at 6.7 MMT.
• Retail Network Expansion and Automation: 338 new retail outlets (ROs) were added, increasing the total network to 6,683 ROs. The network achieved 100% automation, which supports compliance and transparent digital reward programs.
• Petrochemical Commissioning: The 450 KTPA Polypropylene (PP) plant was commissioned in July 2024, marking a significant integration step. The plant produced 0.21 MMT of PP in its first nine months of operation.
• Enhanced Retail Integration: Achieved the highest-ever retail integration, with 80% of retail sales sourced from the Group’s own molecules, significantly improving supply chain resilience and margins.

Sustainability and Technology

• Biofuel Adoption: The Group demonstrated a strong commitment to India’s import reduction goals by achieving an overall 12.7% ethanol blending in MS. Two new ethanol-blended fuel grades, E15 and E20, were introduced.
• Research & Development Success: The Refinery received two Indian Patents during the year. One was for improving the Saybolt colour of MTO/ATF, and the other for developing a novel test method for measuring asphaltenes in crude oil.
• Safety Improvement: The Total Recordable Injury Rate (TRIR) saw a significant decline to 0.058 as of March 31, 2025, compared to 0.171 in the prior period.
• IT Compliance: The accounting software used by the Company and its subsidiary incorporated in India (Coviva Energy Terminal Limited) includes the mandatory audit trail (edit log) facility, which operated throughout the year for all relevant transactions.

External Challenges and Corporate Actions

• EU Sanctions Imposition: On July 18, 2025, Nayara Energy was designated under the European Union’s amended Regulation (EU) No. 269/2014. These sanctions necessitated immediate and decisive action, impacting operational flexibility, access to specific EU financial and service channels, and trade flows. Management established a Sanctions Risk Mitigation Task Force to ensure compliance and safeguard business continuity.
• Buyback Offer: Post-balance sheet date, the Board approved a buyback offer to minority public shareholders (up to 1.74% of paid-up equity capital) at a price of ₹ 731 per equity share, aimed at providing an exit opportunity. The Company subsequently bought back 2,170,347 equity shares in May 2025.
• Unspent CSR Obligation: The Company was required to spend ₹ 180.3 Crore on CSR activities but only spent ₹ 34.52 Crore (₹ 345.16 million), leaving a significant unspent amount of ₹ 145.73 Crore (₹ 1,457.34 million), which was attributed to delays in finalizing partners and project KPIs given the substantial increase in the budget. The unspent amount was transferred to the Unspent CSR Account in April 2025.
• Going Concern Assessment: Despite geopolitical developments and allied sanctions, management remains confident that the net cash inflows will provide sufficient liquidity, and external legal opinions suggest the sanctions are unlikely to materially impact operations or the ability to raise capital, leading the Group to continue preparation of financial statements on a going concern basis.