Shares of Bharat Petroleum Corporation (BPCL) tanked up to 6.4 per cent to Rs 391 apiece on the BSE on Tuesday after media reports said the divestment of government’s stake in the oil marketing company is unlikely to fructify in the current financial year.
The stock, however, pared losses later to trade 1.74 per cent lower on the BSE, as against 760 points, or 2 per cent, rally in the benchmark S&P BSE Sensex, after DIPAM secretary clarified that the proposed divestment would go ahead as planned and will happen in the current financial year. A combined 25.66 million shares had changed hands on the counter on the BSE and NSE till th time of writing od this copy, data shows.
News agency Cogencis reported earlier in the day, quoting unnamed government official, that BPCL stake sale to go beyond FY21 as delay in inviting bids to pick stake in the oil refiner will delay the entire process of divestment.
On July 29, the government had for the third time extended the deadline for bidding for privatisation of India’s second-biggest oil refiner Bharat Petroleum Corp Ltd by two months to September 30.
While the Cabinet had in November last year approved the sale of government’s entire 52.98 per cent stake in BPCL, offers seeking expression of interest (EoI) or bids showing interest in buying its stake were invited only on March 7. The EoI submission deadline was May 2, but on March 31 it was extended up to June 13. On May 26, it was extended to July 31 and now it has been extended till September 30.
“In view of the further requests received from the Interested Bidders and the prevailing situation arising out of Covid-19, last date and time for submission of EoI is extended up to September 30, 2020,” the Department of Investment and Public Asset Management (DIPAM) said in a notice.
The government is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 114.91 crore equity shares, which constitutes 52.98 per cent of BPCL’s equity share capital along with transfer of management control to a strategic buyer (except BPCL’s equity shareholding of 61.65 per cent in Numaligarh Refinery Ltd), the notice inviting offer said.
BPCL has a market capitalisation of about Rs 68,223 crore and the government stake at current prices is worth about Rs 36,159 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the same price.
Privatisation of BPCL is essential for meeting the record Rs 2.1 lakh crore target Finance Minister Nirmala Sitharaman has set from disinvestment proceeds in the Budget for 2020-21.