Indian public OMCs are losing big and deep in debt

The government should come to the rescue again at fiscal-end.

In its daily research comment, Nomura said that "there is no denying that the three public sector (PSU) oil marketing companies (OMCs) remain in dire straits."

"The three OMCs reported a combined loss of USD7.5bn in 1QFY13 and total debt in excess of USD28bn. Last week’s price change came after 15 months, and the impact is only minor. With the oil price remaining high and INR weak, sharp further hikes are warranted, but look unlikely to happen soon," it said.

"The Indian government (GOI) typically comes to the rescue closer to the fiscal-end to ensure fiscal-year profitability. We still believe that for the OMCs to emerge as LT investment ideas, reforms are a must, but visibility is low." it added.