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Business News/ Companies / News/  Fresh BPCL disinvestment plan in works

NEW DELHI : The Centre will come up with a fresh disinvestment plan for state-run energy major Bharat Petroleum Corporation Ltd (BPCL) after its expansion plans have been completed.

In November 2020, the government had received bids for BPCL from mining major Vedanta Resources and private equity firms Apollo Global and I Squared Capital’s arm Think Gas. Vedanta was the only player in the fray after the exit of Think Gas. The plan was thus scrapped, said a senior government official aware of the developments.

The disinvestment was also impacted by the covid pandemic. Mint had earlier reported that high oil prices and a shift towards renewable energy also impacted the disinvestment prospects.

In the fresh plan, the government is likely to stick to its decision to sell its entire stake of 52.98% in the company and transfer management control as part of the strategic disinvestment to make the deal lucrative.

Last month, Mint had reported that the government is weighing its options on the strategic disinvestment of the state-run energy company, including whether it needs to return to the drawing board and restart the bidding process or revise certain conditions in the existing disinvestment process. However, such a revision would mean beginning the process afresh for the government, which will fully exit the profit-making fuel marketer.

The previous disinvestment proposal required bidders to have a net worth of $10 billion, and had excluded public sector units with government ownership of 51% and more.

The fresh disinvestment plan is likely to be put into place after BPCL’s expansion initiatives are complete. The company has plans for the expansion of the Bina refinery in Madhya Pradesh and its green energy initiatives, said the first official. The Bina refinery is owned and operated by Bharat Oman Refineries Limited, a wholly-owned subsidiary of BPCL. Besides, as part of its green energy initiatives, the company is adding capacities in the solar, wind, hydrogen spaces fuel along with 2G ethanol bio-refineries.

A second official aware of the government’s thinking on the BPCL disinvestment said that it had no plans to sell its shareholding in parts, as this would not enthuse potential investors.

BPCL had in March 2021 sold its 61.65% stake in Assam-based Numaligarh Refinery Ltd for 9,875 crore to the Assam government and a consortium of Oil India Ltd and Engineers India Ltd, as part of the privatization process. The government’s major challenge is to ensure availability of fuel in every corner of the country, including the remote areas of Leh and Lakshadweep, said the first official. The government is confident about meeting the energy requirement in the country, the official said.

Shares of BPCL closed at 332.00 on BSE on Wednesday, 3.05% lower than its previous close. Its market capitalization is 72,019.19 crore.

Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 19 May 2022, 06:09 AM IST
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