BPCL divestment opens up to mixed reactions, but the company’s shares takes a hit
- The Indian government is selling one of its profitable oil companies –
Bharat PetroleumCorporation Limited.
- The government will sell 53.29% stake in
BPCLto a strategic buyer, also giving up management control in the oil giant.
- The Numaligarh Refinery in Assam will be carved out of the divestment, said Finance Minister
The government will be selling its 53.29% stake in BPCL to a strategic buyer, also giving up management control of the oil retailer. However, the Numaligarh Refinery in Assam which is a part of BPCL, will be carved out of the divestment, said Finance Minister Nirmala Sitharaman.
Mixed reaction from the public
The government’s decision to sell one of the few profitable PSUs has seen mixed reactions from the public. BPCL had reported profits of ₹7,132 crore along with total sales worth ₹3.37 trillion in the last financial year.
“This govt is now selling off the country's most profitable companies as well. This is a loot,” said Congress leader KC Venugopal today.
The shares of BPCL too fell on Thursday morning to ₹532.
However, BPCL also makes for an attractive sale unlike Air India which is still awaiting investor interest. A good sale will help Indian government meet its ambitious disinvestment target of ₹1.05 lakh crore for the current fiscal year.
“It would also increase the free float available in the market which may have positive impact on Foreign Portfolio Investments in Indian capital markets and in the creation of wider investment space for retail and institutional investors and may increase in the market premium of CPSEs due to likely positive investors perception,” said the government’s press release.
Started as the Rangoon Oil and Exploration company during the British rule, BPCL changed many hands and was finally purchased by the government at market price in 1976.
Today, the BPCL has a capacity of 37 million tonnes per annum. It also has over 15,000 retail outlets in India.