Initially, the department of investment and public asset management (Dipam) wanted to conclude the BPCL transaction by the June quarter. But the second wave of Covid delayed the processes. “The due diligence process is going on. It will take some more time,” a senior official said
With due diligence by potential buyers yet to be completed, financial bids for the government’s entire stake in the fuel retailer-cum-refiner BPCL are expected to come in after September. However, despite the delays, the government is hopeful that the strategic disinvestment worth over Rs 54,000 crore at the current market prices will go through during the current fiscal.
Initially, the department of investment and public asset management (Dipam) wanted to conclude the BPCL transaction by the June quarter. But the second wave of Covid delayed the processes. “The due diligence process is going on. It will take some more time,” a senior official said.
In November 2020, multiple bidders, including Vedanta, Apollo Global Management and Think Gas, showed interest in BPCL. The market value of the Centre’s 52.98% stake was worth a little over Rs 54,300 crore, based on its share prices on Monday. The share price of BPCL closed at Rs 472.6 on the BSE on Monday, up 0.29% from the previous closing price.
The petroleum ministry will also likely allow BPCL to keep subsidised LPG consumers post-privatisation for a few years before transferring them to other state-run fuel retailers such as IOC and HPCL, another official said.
Of the disinvestment target of Rs 1.75 lakh crore for FY22, the Centre has budgeted Rs 75,000 crore from privatisation of some CPSEs such as BPCL. Another Rs 1 lakh crore is expected to come from the “public-sector financial institutions”, including LIC and banks.
The initial public offering (IPO) of LIC, which will be the largest in India, will be key to achieving the disinvestment target for the current fiscal. The LIC IPO, expected in Q4FY22, could include offloading of up to 10% government stake and fresh equity issuance by the insurer for business expansion plans. While the valuation of the insurer — which have played White Knight to the government — will be known closer to the listing, it is believed to be worth Rs 8-11.5 lakh crore. This means a 10% stake sale could fetch the government around Rs 80,000-1,00,000 crore.
