Oil marketing company IBP Ltd is planning to invest Rs 1,000 crore by the end of the next financial year to set up new retail outlets and upgrade the existing ones.

A K Sinha, director, (finance) of the company, said, IBP would add another 1,000 outlets this fiscal. "We intend to take the number of ROs to 3,000 in fiscal 2003-04," he said.

IBP will invest around Rs 600 crore (Rs 6 billion) for 1,000 new outlets. It will spend another Rs 200 crore (Rs 2 billion) for decking up the ones it had opened in the last fiscal.

It will invest Rs 200 crore (Rs 2 billion) more for modernising the remaining outlets.

"The investment will be phased over two years even though new outlets will come this fiscal year, provided government guideline on dealer selection comes fast. We plan to raise the resource through internal accruals. The company has no plans to go for market borrowings to fund the expansion at this juncture," Sinha said.

IBP has reserves of Rs 476 crore (Rs 4.76 billion) as on March 2003 and hopes to add another Rs 300 crore (Rs 3 billion) this year if crude prices remain stable in the same period.

It has a 9 per cent share of the retail market nationally. The company hopes that the incremental volume in number of outlets will push up its market share over 10 per cent by two years.

IBP intends to focus on highways, mainly the Golden Quadrilateral for the expansion. Last year, the company consolidated its presence in southern and western market.

Since the dealer selection board was dissolved in the last fiscal year and no alternative was introduced, the company only went for company-owned, company-operated ROs.

However, once the new policy is in place, it will prefer more dealer-operated ROs but the site will be leased to the company.

The company will also encourage other merchandising sales from ROs as it foresees more non-fuel sale in future.

It has recently tied up with Amul and Lipton and more such arrangements are on the cards. IBP posted a net profit of Rs 87.75 crore (Rs 877.5 million) in FY 02-03, down from Rs 195.79 crore (Rs 1.957 billion) last year.

The company's shares, which moved up sharply over the last one month, closed at Rs 523.55 at the NSE on Thursday, up Rs 24.20, or 4.85 per cent, over the previous close.