The bonus issue will now have to be formally approved by shareholders at annual general meeting or extraordinary general meeting (AGM/EGM), on which a decision would be taken shortly, the spokesman said.

The last bonus issue by the cash-rich public sector company was in September 1994 in the ratio of 2:1 (two shares for every shares held). IOC officials said the liberal bonus issue would lead to better liquidity of the company's scrips.

The corporation's equity capital at present stands at Rs 389.34 crore with free reserves and surplus as on March 31 1999 at Rs 12,000 crore. It posed a 30 per cent increase in its net profit at Rs 2214 crore during 1998-99.

Government of India still holds 81 per cent stake in the oil company,while employees and financial institutions hold nine per cent. The government had recently divested 10 per cent stake in the company in favour of Oil and Natural Gas Corporation (ONGC). IOC also in turn picked up 10 per cent equity in ONGC.

The company is expected to hit the domestic market later in the year to offload five per cent of the government stake. Bonus issue would double the floating stock of IOC shares. The IOC board also approved appointment of a new distributor to market servo brand lubricants in Bangladesh.

The board also cleared a proposal to set up a facility for production of purified terephthalic acid (PTA) with paraxyelene as intermediate at Panipat refinery.

The production of PTA will be 5,25,000 million tonnes per year and the cost of the project is Rs 4,228 crore, including a foreign exchange component of Rs 1570 crore. The spokesman said IOC would go ahead with the project on its own and take a partner subsequently. The project is scheduled for completion in 42 months.

PrimeMinister Atal Bihari Vajpayee is scheduled to dedicate the six million tonne Panipat refinery to the nation on June 24. The refinery also included a petrochemical complex.