India is contemplating promoting as much as 1 / 4 of state-run refiner Bharat Petroleum Corp Ltd after failing to draw suitors for the entire agency.
India is contemplating promoting as much as 1 / 4 of state-run refiner Bharat Petroleum Corp Ltd after failing to draw suitors for the entire agency, two officers mentioned, as the federal government’s divestment program strikes slower than anticipated.
New Delhi is contemplating inviting bids for a 20%-25% stake in BPCL, as an alternative of an outright sale of its whole 52.98% holding, the 2 authorities officers, who declined to be named, informed Reuters.
The officers mentioned discussions concerning the plan had been within the early levels.
Initially, the federal government had aimed to lift $8-$10 billion from promoting its full stake in BPCL. Having drawn up plans 4 years in the past, it invited bids in 2020, hoping main gamers corresponding to Russia’s Rosneft may be .
But Rosneft and Saudi Aramco didn’t bid, as low oil costs at the moment and weak demand curbed their funding plans.
The authorities officers mentioned even an element sale of BPCL was unlikely to be accomplished this fiscal 12 months as the method would take over 12 months.
Sale prospects had been hit by inconsistent insurance policies on petrol and diesel costs, one in every of them mentioned.
“There were many issues but most recently petrol prices not being raised for four months between November and February were presumed due to elections by the government,” the official mentioned.
India had elections in 5 states together with the bellwether Uttar Pradesh in February and pump costs solely began transferring up from March 22, by which period Prime Minister Narendra Modi’s Bharatiya Janata Party had received in 4 out of 5 states.
The present dialogue started in any case bidders had withdrawn from the method final month, each officers mentioned.
Private fairness agency Apollo Global Management and oil-to-metals conglomerate Vedanta Group had been the ultimate bidders, they mentioned.
The authorities, Vedanta and BPCL didn’t instantly reply to emails in search of remark. Apollo Group declined to remark.
The backtracking on BPCL’s full stake sale is symptomatic of gradual progress within the authorities’s privatisation plans.
In 2020, Finance Minister Nirmala Sitharaman introduced plans to denationalise most state-run firms, together with banks, mining firms and insurers.
But little progress has been made, and each officers mentioned the federal government had deferred plans to promote every other banks this fiscal 12 months other than IDBI Bank, which is majority owned by Life Insurance Corp of India. LIC sank on its market debut on Tuesday after the federal government bought a 3.5% stake.
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With inputs from NDTV
