New Delhi: Indian Oil Corp (IOC), the country’s biggest oil firm, will decide on bidding to buy Bharat Petroleum Corporation Ltd (BPCL) only after the government lists out rules for the stake sale, its chairman Sanjiv Singh said Thursday.
The Cabinet Committee on Economic Affairs (CCEA) had November 21, 2019 decided to sell government’s entire 53.29 per cent stake in country’s second-largest state refiner BPCL, but a tender for sale hasn’t yet been floated.
“The expression of interest (EoI) (for BPCL stake sale) hasn’t been issued yet. We don’t know the conditions. We have no information whether PSUs are allowed to bid or not,” Singh told reporters here. “I cannot comment if IOC will bid or not unless we see the conditions set out in the EoI.”
Singh said a decision on the issue can only be taken once there is clarity on the bidding process the government intends to follow.
Soon after the Cabinet decision, a senior minister had hinted that PSUs will be kept out of BPCL privatisation.
“Since 2014, we have a clear vision that the government has no business to be in business,” the minister had then said.
Asked if the company has been told that PSUs will be kept out, Singh said there is no information on whether state-owned firms can bid or not.
BPCL will give the buyer ready access to 14 per cent of India’s oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world’s fastest-growing energy market.
At the current trading price of BPCL, the government’s 53.29 per cent stake is valued at around Rs 53,400 crore. On top of this, the acquirer will have to make an open offer to buy an additional 26 per cent stake from minority shareholders for about Rs 26,000 crore.
The price of BPCL has been hammered since the November 21 CCEA decision. On that day, the government stood to gain Rs 62,000 crore from privatisation but will now get about Rs 8,000 crore less.
The stake sales are critical for the government to meet its disinvestment target of Rs 1.05 lakh crore set for the current financial year.
PTI