India’s oil minister Dharmendra Pradhan on Wednesday said the privatization of state-owned Bharat Petroleum Corporation Ltd (BPCL) has received three preliminary bids.
Speaking at a webinar organised by Swarajya magazine, Pradhan said there was lot of interest in BPCL and Department of Investment and Public Asset Management (DIPAM) had recently informed the stock market about it.
“I think three parties have given their expression of interests for the bidding process," Pradhan said and added, “As I have earlier said, government is committed to offload its share from some of the state-owned companies. That way more professionality, more competition will come and we are committed and keen on that aspect."
The Centre had earlier said it has received expressions of interest (EoIs) from “several" domestic and international investors for BPCL’s stake sale. Vedanta Group and two US funds have reportedly submitted their EOIs. In the wake of the pandemic, the government had extended the deadline for preliminary EoI in BPCL four times this year.
The qualifying bidders in the first EoI phase will be asked to make a financial bid in the second round. Public sector undertakings are not eligible to participate in the privatization.
The sale of 53% stake in India’s second largest fuel retailer is expected to fetch the Centre around Rs. 450 billion and is essential for meeting the record Rs. 2.1 trillion target the finance minister has set from disinvestment proceeds in the budget for 2020-21. India has so far managed around Rs 61 billion in disinvestment proceeds.
“Disinvestment agenda continues. We shall go with greater momentum in getting privatization—that which has been cleared by the cabinet--to go forward," finance minister Nirmala Sitharaman said at a conference organised by Confederation of Indian Industry lobby group also month.
The qualifying bidder will not only have a controlling stake in BPCL, but will also get access to 25.77% market share in India’s fuel retailing segment, along with 15.3% of India’s total refining capacity. BPCL operates four refineries in Mumbai, Kochi, Bina, and Numaligarh in Assam, with a combined capacity of 38.3 million tonnes per annum.
India is the world’s third-largest crude oil buyer and a key refining hub in Asia, with an installed capacity of more than 249.36 million tonnes per annum (mtpa) through 23 refineries. Large Indian refiners include IOC, Bharat Petroleum Corp. Ltd, Hindustan Petroleum Corp. Ltd, Nayara Energy Ltd (formerly Essar Oil) and Reliance Industries Ltd. Prime Minister Narendra Modi has said that India plans to grow its refining capacity from around 250 million tonnes per annum (mtpa) to 400 mtpa by 2025.