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Photo: Reuters
Photo: Reuters

The BPCL surprise

The government needs to offload BPCL just to relieve itself of some pressure to meet this year’s steep stake-sale target of 2.1 trillion. Any failure on this score will worsen its fiscal arithmetic

With Monday’s expiry of the government’s deadline for submitting expressions of interest (EOIs) in the purchase of Bharat Petroleum Corp. Ltd (BPCL), a state-run oil refiner and fuel retailer, India’s disinvestment programme was expected to spring back to life after what seemed like a covid-induced slumber. Unlike Air-India, which found no suitors, BPCL was seen as a coveted company.

Like aviation, though, the oil business has turned sluggish globally, which may explain why global oil majors like BP, Total and Saudi Aramco looked the other way after BPCL was put on the block. The surprise, perhaps, was that even Reliance Industries was not among the “multiple" entities reported to have sent in EOIs. After all, it’s an asset that few can afford to buy. By current market value, it would take about $10 billion to first acquire the government’s 52.98% stake up for sale, and then pay for another 26% to be picked up from other shareholders through an open offer. On its part, the government needs to offload BPCL just to relieve itself of some pressure to meet this year’s steep stake-sale target of 2.1 trillion. Any failure on this score will worsen its fiscal arithmetic.

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