In November, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of government stake in five major public sector undertakings (PSUs): BPCL, Shipping Corporation of India, Container Corporation of India, THDC India (formerly Tehri Hydro Development Corporation), and North Eastern Electric Power Corporation. The government would be handing over management control in each of these divestments to a strategic buyer.
BPCL, however, is the most lucrative on the government’s disinvestment list. At the current trading price, the government’s 53.29 per cent stake in BPCL
is valued at close to Rs 54,400 crore. The government proposes to raise Rs 1.05 trillion from disinvestment in the current financial year and BPCL
would be crucial to achieving the target.
Dharmendra Pradhan, Minister of Petroleum and Natural Gas, had said after the CCEA decision that there was a clear vision since 2014 that the government had no business to be in business, in response to questions on whether PSUs would be allowed to bid for the government’s stake in BPCL.
IOC, however, has precedence over bidding aggressively in the past.
In 2002, IOC had bagged the government’s 33 per cent stake in IBP. IOC’s bid was Rs 1,153.68 crore, which translated into Rs 1,551 a share. The other bidders for IBP were Reliance Industries, Reliance Petroleum, Royal Dutch Shell, Kuwait Petroleum Corporation, BPCL, and Hindustan Petroleum Corporation. The reserve price for IBP was Rs 337 crore.