The government has received ‘three preliminary bids’ for its controlling stake in India’s second-biggest fuel retailer Bharat Petroleum Corporation (BPCL), petroleum minister Dharmendra Pradhan mentioned on Wednesday. Department of investment and public asset management (Dipam) secretary Tuhin Kanta Pandey told FE that quick-listing of firms from the preliminary bids have been carried out right after scrutiny by the transaction advisor. Financial bids are anticipated in February, he added.
The final date for submission of expression of interest (EoI) was November 16.
Vedanta, India arm of Anil Agarwal-controlled Vedanta group, is the only firm to have confirmed presence at the EoI stage of the BPCL sale method. PTI reported on Wednesday that two worldwide funds, like Apollo Global Management, are “said to be” in the fray.
“The shortlisted firms will be given data room access and contracts copy, sign confidential undertaking, field queries, look at the assets and might visit some of the facilities of BPCL.. All the painstaking work is now beginning,” Pandey told FE.
The stake sale, anticipated to be completed this fiscal was earlier noticed to fetch about `70,000 crore to the exchequer. The BPCL sale is most likely to be single biggest element of the Centre’s disinvestment receipts this fiscal, which is most likely to be far beneath the ambitious Rs 2.1 lakh crore budgeted.
The government’s stake in BPCL was worth about Rs 60,000 crore in November 2019, about the time the stake sale proposal was authorized by the Union Cabinet. However, the actual receipts will rely on valuation and consideration of a premium (ONGC had purchased the Centre’s stake in HPCL in FY18 at a premium of 14% to the stock’s value). As per the Sebi takeover code guidelines, an acquirer enterprise has obligation to launch a mandatory open give for an added 26% stake in the target enterprise.
The BPCL stock closed at Rs 384.45 on the BSE on Wednesday, up 1.4% from preceding closing value. Vedanta share value rose 2.1% to close at Rs 124.1 for the duration of the day.
BPCL owns and operates 4 refineries in India and 15% share of the country’s 250 million tonne refining capacity it also has 17,000-robust retail fuel outlet network in the nation, and a more than quarter of the retail marketplace share. Its privatisation is noticed as essential for the government to enhance its non-debt capital receipts this fiscal, when all income streams are faltering due to deep financial slump brought on by Covid-19 pandemic.
Vedanta, component of London-headquartered Vedanta Resources, possessing a diversified business enterprise portfolio straddling minerals and power, had acquired a 58.5% stake in Cairn India for $8.67 billion in 2011. Vedanta Group had acquired majority stake in Bharat Aluminium Company (Balco), then a PSU, in 2001 it has also more than the years acquired a controlling stake in Hindustan Zinc, beginning with 26% stake it purchased in 2002-03. A Supreme Court selection is getting awaited on the sale of the government’s residual stakes in these businesses.
Private firms have a share of more than a quarter of the country’s crude oil output, extra than 90% it comes from Vedanta-owned Cairn assets in Rajasthan, Andhra Pradesh and Gujarat. The remaining 74% domestic crude is made by state-run ONGC and Oil India. To be confident, about 85% of the India’s crude oil demands are nevertheless met by imports.
BPCL operates 4 refineries in India, Mumbai Refinery, Kochi Refinery, BORL-Bina Refinery (Bharat Oman Refineries Limited, a joint venture among BPCL and Oman Oil Company) and Numaligarh Refinery with a combined crude oil refining capacity of 38.3 million tonnes per annum. BPCL’s stake in Numaligarh refinery will be sold to yet another CPSE oil firm separately.