A

Project Report On

“STUDY OF SOURCES OF
FUNDS of BHARAT
PETROLEUM”

SUBMITED TO

Savitribai Phule Pune University

In Partial Fulfillment of the Requirement for Award of the Degree of
BACHELOR OF BUSINESS ADMINISTRATION

By
RADHA CHOUDHARI
FINANCE
SEAT NO.:3193

Under the Guidance of

Prof. Rutuja Kambale

CHANAKYA EDUCATION SOCIETY’S

INDIRA COLLEGE OF COMMERCE & SCIENCE

PUNE - 411033
 DECLARATION
I hereby declare that the project titled S t u d y o f s o u r c e s o f f i n a n c e
o f B h a r a t P e t r o l e u m an original piece of research work carried out by
me under the guidance and supervision of Prof. Rutuj Kambale. The
information has been collected from genuine & authentic sources. The work
has been submitted in partial fulfillment of the requirement of Bachelor of
Business Administration to Savitribai Phule Pune University.
 ACKNOWLEDGEMENT

I take this opportunity and privilege to express my gratitude to Honorable Dr.

Tarita Shankar (Founder Secretary & Chief Managing Trustee) & Professor
Chetan Wakalkar (Vice – President) and Chanakya Education Society, Pune,
and Dr. Prakash Pandare (Principal), Dr. Janardan Pawar, (Vice- Principal), Dr.
Thomson Varghese (HOD) ICCS. They have been a source of inspiration to
me, and I am indebted to them for initiating me in the field of research.

I am deeply indebted to Faculty Member, Prof. Rutuja Kambale, my research

guide at Chanakya Education Society’s Indira College of Commerce &
Science, Pune without whose help completion of this Project was highly
impossible.

I take this opportunity and privilege to articulate my deep sense of gratefulness

to the managing director, and the staff of (Company Name), for their timely
help and positive encouragement.

I wish to express a special thanks to all teaching and non-teaching staff

members of Indira College of Commerce & Science, Pune for their continuous
support. I would like to acknowledge all my family members, relatives and
friends for their help and encouragement.
 INDEX
SR. NO. PARTICULARS PG. NO.

1. INTRODUCTION TO SOURCES OF FINANCE 5-9

2. OBJECTIVES AND SCOPE 10-11

3. COMPANY PROFILE 11-15

4. DATA ANALYSIS 16

5. SWOT ANALYSIS 17-18

6. CONCLUSION 19-21

7. REFERENCES 23
Introduction to sources of Finance

A. Long term sources of finance:

1.Equity shares
2.Preferance shares
3.Debentures
4.Term Loan
5.Lease Financing

B. Short term sources of finance

1.Bank Overdraft
2.Cash Credit
3.Bill Discounting
A. Long term sources of finance:

1.Equity shares

An equity share, normally known as ordinary share is a part ownership where

each member is a fractional owner and initiates the maximum entrepreneurial
liability related to a trading concern. These types of shareholders in any
organization possess the right to vote.

Types of Equity Share

 Authorized Share Capital- This amount is the highest amount an

organization can issue. This amount can be changed time as per the
companies recommendation and with the help of few formalities.

 Issued Share Capital- This is the approved capital which an organization

gives to the investors.

 Subscribed Share Capital- This is a portion of the issued capital which

an investor accepts and agrees upon.

 Paid Up Capital- This is a section of the subscribed capital, that the

investors give. Paid-up capital is the money that an organization really
invests in the company’s operation.

 Right Share- These are those type of share that an organization issue to
their existing stockholders. This type of share is issued by the company to
preserve the proprietary rights of old investors.

 Bonus Share- When a business split the stock to its stockholders in the
dividend form, we call it a bonus share.
  Sweat Equity Share- This type of share is allocated only to the
outstanding workers or executives of an organization for their excellent
work on providing intellectual property rights to an organization.

2.Preferance shares

Preference shares, also known as preferred stock, is an exclusive share option

which enables shareholders to receive dividends announced by the company
before the equity shareholders.

Preference shares provide the shareholders with the special right to claim
dividends during the company lifetime, and also with the option to claim
repayment of capital, in case of the wind up of the company.

It is considered as a hybrid security option as it represents the characteristics of

both debt and equity investments.

The capital raised by issuing preference shares is known as preference share

capital and preference shareholders can be regarded as owners of the company.
They however do not enjoy any kind of voting rights, unlike equity
shareholders.

3.Debentures

A debenture is one of the most typical forms of long term loans that a
company can take. It is normally a loan that should be repaid on a specific date,
but some debentures are irredeemable securities (sometimes referred to as
perpetual debentures).
The majority of debentures come with a fixed interest rate. This interest must be
paid before dividends are paid to shareholders. In the US, most debentures are
unsecured, but elsewhere debentures are typically secured through the
borrower’s assets.

4. Term Loan

The word debenture is derived from the Latin word ‘debere’, which means to
borrow or take a loan. It is a debt instrument that may or may not be secured by
any collateral. Governments or companies use them for raising capital by
borrowing money from the public. In simple words, it is a legal certificate that
says how much the investor has invested (principal amount), the interest to be
paid and the schedule of payments. The investor receives the principal and
interest at the end of maturity.
They are like unsecured loans where the investor has no claim to the company
assets if a default occurs. The repayment solely depends on the company
creditworthiness of the issuing company. However, before paying stock
dividends to its shareholders, the issuing company will fix the debt interest
payments. Sometimes, companies also issue them with security, i.e. they have
an asset as a mortgage. In liquidation, the company has to preferably pay the
creditors by liquidating their assets.

5.Lease financing

Lease financing is one of the important sources of medium- and long-term

financing where the owner of an asset gives another person, the right to use that
asset against periodical payments. The owner of the asset is known as lessor and
the user is called lessee.

The periodical payment made by the lessee to the lessor is known as lease
rental. Under lease financing, lessee is given the right to use the asset but the
ownership lies with the lessor and at the end of the lease contract, the asset is
returned to the lessor or an option is given to the lessee either to purchase the
asset or to renew the lease agreement.

B. Short term sources of finance

1.Bank Overdraft
Bank overdraft is a type of financial instrument that is provided to some
customers by the bank in the form of an extended credit facility, which comes
into effect once the main balance of the account reaches zero.
In other words, bank overdraft is an unsecured form of credit that is mainly used
for covering short term cash requirements.
Banks offer a credit limit to the bank customers based on their relationship with
the bank. The bank levies separate interest and charges towards non-
maintenance of account. The interest rate for the overdraft facility may vary
from bank to bank.

2.Cash Credit
The Cash Credit facility is one of the most common benefits or facilities offered
by the banks to the business concerns that have an account with any of their
branches.

Cash Credit is a type of a short term loan available to the business

organizations. This type of loan or facility is allowed by the banks which can
also be in line with the overdraft facility offered to the business entities.
Objective and Scope-
a.To study about the different sources of finance available

in public limited companies.

b.To perform data analysis

c.To find out Strengths , weakness , opportunities & threats and perform SWOT
analysis.

Scope of Research-
a.Area is restricted to only Pune because due to time constraint and not able to
visit all the branches in other cities or states.

b.All the classes of the sources were taken into consideration.

c.This study will cover different sources of finance available.

 Company Profile
Bharat Petroleum
Bharat Petroleum Corporation is an Indian government-owned oil & gas
corporation currently operating all over India. Bharat Petroleum is the leading
producer of petrol, diesel, kerosene, lubricants, liquefied petroleum gas and
rubberized bitumen.

The company’s business has been divided into seven business strategic units
like retail, lubricants, aviation, refinery, gas, I&C and LPG. Bharat Petroleum
began its operation with the import and marketing of kerosene. Soon the
company also took on the challenge to expand its operation and the first drive-
through fuel station was built.
Since then, the network of fuel stations has reached the 16,000 mark, with
approximately 1 Crore vehicles fueling up every day.
Bharat Petroleum is one of the seven Indian companies to be ranked in the latest
Fortune 500 list of the world’s biggest corporations in terms of revenue by
acquiring the 358th position and 792nd position on Forbes 2021.
 Quick Stats about Bharat Petroleum

Founder Asiatic Petroleum Company

Year Founded 1928

Origin Mumbai, India

No. of Employees 40,172

Company Type Public

Market Cap ₹97,019 Crore (2021)

Annual Revenue ₹300,830 Crore (2021)

Net Income/ Profit ₹19,042 Crore (2021)

Products of Bharat Petroleum:

Bharat Petroleum has been in the Petroleum Industry for more than a half-
century and deals in:
 Aviation Turbine Fuel for aircrafts
 Hi-speed Diesel
 Liquefied Petroleum Gas (LPG)
 Naphtha (The major raw material for fertilizers)
Competitors of Bharat Petroleum:
Bharat Petroleum competes on a national level with other oil & gas producing
companies:
 Hindustan Petroleum Corporation
 Indian Oil Corporation
 Reliance Petroleum
 Oil & Natural Gas Corporation
Now that we understand the company’s key business, let’s probe into the
SWOT Analysis of Bharat Petroleum.
Data Analysis of Bharat Petroleum

Bharat Petroleum Corporation Ltd. (Bpcl) - Financial Overview

PARTICULARS ( CR) 2021 2020 2019

NET SALES 232545.11 284382.95 297275.05

OPERATING PROFIT 27923.99 8639.79 14947.86

OTHER INCOME 13766.87 3081.31 2983.60

INTEREST 1328.36 2181.86 1318.96

DEPRECIATION 3978.05 3786.89 3189.28

PROFIT BEFORE TAX 22617.58 2671.04 10439.62

TAX 3575.91 -12.15 3307.60

PROFIT AFTER TAX 19041.67 2683.19 7132.02

SHARE CAPITAL 2092.91 1966.88 1966.88

RESERVES 52451.64 31247.50 34770.80

NET WORTH 54544.55 33214.38 36737.68

LOANS 36368.79 49828.52 31180.20

GROSS BLOCK 80610.86 69785.44 55792.37

INVESTMENTS 17684.09 16058.02 15991.62

CASH 7053.49 115.78 95.41

DEBTORS 7827.47 5164.34 6670.72

NET WORKING CAPITAL 1840.62 529.05 -1627.59

 SWOT Analysis of Bharat Petroleum

1. Strengths of Bharat Petroleum

Strengths for the company are the areas where the company is performing well
which are helping them to outplay its competitors, thus increasing the market
share. Following are the strengths of Bharat Petroleum:
 Large Network – BPCL has over 16,000 fuel stations and is extending its
network to reach rural areas of the country. Along with this, they have retail
outlets all over the country.
 Research and Development – It is an essential part of BPCL. Their
experimentation with crude oil continues so that they extract any other valuable
products or enhance the efficiency of the already available ones. Few of their
successful findings are semi-synthetic 4T engine oil, hydraulic oils, etc.
 Brand Awareness – It has a well-built brand presence in its domestic market
which helps in captivating new customers. Their prominent products such as
Bharat Gas and Mak Lubricants have a stronghold in the market.
 Production Capacity – They have two of the largest refineries in their name
based in Mumbai and Kochi, and with the help of these, they can cater to the
ever-growing demands of the market.
 2. Weaknesses of Bharat Petroleum
The areas in which the company is performing low are said to be its weakness.
The management can take crucial steps to eliminate its weaknesses. Bharat
Petroleum’s major flaws are as follows:
 Government Regulations – As 53% of their lies with the government, so their
activities are bound by the legislation and are not able to make profits like
private companies.
 Employees – They have more than needed employees carrying out their day-to-
day operations. More employees mean an increased cost of production resulting
in reduced profits.
 Environmental Issues – The refining process creates a lot of pollution and
that’s why their track record on environmental consideration is not very
appreciating. This weakness distorts their brand image and can lead to customer
retaliation.
 Global Presence – Their operations are limited to India which is a highly
competitive market leading to reduced market share for the company. They can
surely make more profits if they make a global presence.

3. Opportunities of Bharat Petroleum

Opportunities are favorable external factors. The company needs to grab the
opportunities that come its way to gain a competitive advantage.
 Oil Field Discovery – New oil fields can be discovered if the oil prices rise in
the future. This will provide an undue advantage to the company over its
competitors.
 Increasing Demand – As the population is increasing, demand for oil and gas
is also increasing day by day So, the management needs to keep a track of it by
keeping its supply sufficient to match the market demand.
 Foreign Market – There is an opportunity for the company if it expands its
operation to the foreign market as well which will make them earn huge profits.
This can be done if the company ties up with many leading foreign player who
is ready to invest in BPCL.
 Funding – The company can generate funds by issuing new shares in the
market because of the growing number of investors.

4. Threats of Bharat Petroleum

Threats are the challenges for the company which can stop the company from
meeting its objectives in the long run.
 Electric Motors and Appliances – Several customers are shifting to the new
market segment and are using electric vehicles and solar appliances such as
induction cooktops which can lead to reduced demand for the company’s
product.
 Stiff Competition – The company faces intense competition from its
homegrown and established companies like Reliance, Essar, HPCL, etc.
 Regular Price Fluctuations – The price of crude oil constantly fluctuates in the
Middle-East countries according to its irregular excavations which leads to
continuous change in their product’s prices.
 Environmental Laws – The implementation of new laws relating to
environmental considerations can affect the company’s growth as people are
also getting aware day by day.
 Conclusion

Bharat Petroleum is one of the leading corporations in the petroleum sector in

India. In the SWOT analysis of Bharat Petroleum, we observed that the
company has made a presence across the nation and its brands are well
established in the market.

The company regularly faces challenges with the increase in the number of
competitors in the same space. With increasing awareness of the customers
upon the use of electric motors and appliances, the company needs to expand its
services and grow it using better marketing efforts.

In a changing world where digital marketing is of supreme importance, being

well informed in the field is a must for all marketing passionates.
 References

https://efinancemanagement.com/sources-of-finance
https://iide.co/case-studies/swot-analysis-of-bharat-petroleum/

1. Internet
2. Financial Management (TY-BBA)