State-run Indian Oil Corporation (IOC) is reportedly planning to bid for the government's stake in Bharat Petroleum Corporation (BPCL) in a situation where no global players evince interest for the stake and the government agrees to reduce the quantum shares on offer in the company, said a media report.
BPCL would fit well into the scheme of things of IOC, and together the entity would become a powerhouse of refining and retailing activity, which would give tough competition to other players in the field, including the global giants eyeing the Indian market, reported IANS quoting official sources.
There is a fear that no company, including global majors, may commit to invest close to Rs 1 lakh crore required to complete the transaction at one go. So, if the BPCL stake sale does not evince interest from MNCs, as an alternative, the government may sell half or around 26-27 percent of its share to another PSU such as IOC, reported IANS citing official sources.
Last month, Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co are among the global energy companies that reportedly held talks with the government for its stake in the public sector oil company.
The government has 53.3 percent stake in the BPCL which the bidders may buy either on their own or through a consortium.
Privatisation of BPCL will not just shake up the fuel retailing sector long dominated by state-owned firms but also help meet at least a third of the government's Rs 1.05 lakh crore disinvestment target.
The stake sale in state-run companies is the top priority for the government at a time when the fiscal deficit is expected to widen in the coming months.
Ahead of a proposed move to fully privatise BPCL, the government has repealed the legislation that had nationalised the company, doing away with the need to seek Parliament nod before selling it off to private and foreign firms.
— With inputs from agencies
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Updated Date: Nov 06, 2019 11:47:14 IST