Essar Oil Ltd - 500134

Name of Company	Essar Oil Ltd
BSE Code	500134
NSE Code
ICICI Code
Established
My Take	Dislike
Headquarters
Promoters	The Ruia's
Story	Essar oil started commercial refinery production in May 2008 – that is why the revenue had a spurt from 500 odd Cr until FY08 to 37K Cr in FY09 and FY10. The refinery is located in Vadinar in Gujarat.
Sector	Oil
Sub-sector	Exploration, refinery,
Website	http://www.essar.com/section_level1.aspx?cont_id=fBlwNPJhC0c=
Positives	Has onshore and offshore drilling in India and Africa.
Negatives	Low NPM's of 0.08 in FY10, loss making from FY06 to FY09. 30 Cr profit for a 37K Cr revenue is abysmally low. In FY10, the company does not show any reserves as well. The company pays very low tax as well. The management is well known for scams – tax evasion, stating low profits so as to pocket the money.  Promoters hold only 18% in the company and most of it is pledged – which gives the company no power. Pledged promoter stake reminds of the Satyam story – i.e 15% of total stake. Most of the GDR as well is held by group company Vadinar oil. No real institutional investors hold stake in this entity. 17K Cr market cost 550 times earnings.
Peers	Reliance
News	Tax evasion,
Price @ blogged	137.65 (26-Jun-10)