The official said that even without Air India, the Centre was likely to meet its target for the year.
Last month, the Cabinet cleared the sale of the government’s entire 53.29 per cent stake in BPCL. The privatisation plan excludes BPCL’s 61.65 per cent stake in Numaligarh Refinery in Assam.
Government and oil industry officials, as well as sector analysts, are confident that the stake can be sold at a premium of 20-30 per cent, given its strong fundamentals, oil-marketing network, and the attractiveness of other core businesses like refining, pipeline, and petrochemicals. BPCL’s investments also include stakes in Indraprastha Gas, Petronet, and Oil India. Companies like Saudi Aramco, Reliance Industries, Total, and Exxon Mobil are expected to be keen on BPCL.
As of Friday’s closing price, the Centre’s stake in BPCL is valued at a little more than Rs 56,000 crore. A premium of 30 per cent at that price could take the deal value to around 75,000 crore.
That will be around 71 per cent of the total divestment
target this year, which is the highest ever given to the Department of Investment and Public Asset Management. DIPAM has garnered Rs 17,264.26 crore this year so far.
Apart from BPCL, the Cabinet last month approved the strategic disinvestment of the Centre’s entire stake in Shipping Corp, THDC India, and NEEPCO, and most of its stake in Container Corp, while giving up management control in these companies. It also gave an in-principle approval for the government to reduce stake in certain state-owned companies to below 51 per cent while retaining majority stake and thus management control.
The Centre’s 74.23 per cent stake in THDC and 100 per cent stake in NEEPCO will be sold to NTPC. Internal estimates suggest the NTPC’s acquisition of the centre’s stake in two companies could be worth around Rs 8,000 crore.
The Centre’s decision to reduce stake in certain companies to below 51 per cent and still retain management control and hence classify them as state-owned companies will lead to further tranches of the Bharat 22 and CPSE exchange traded funds.
It could also lead to offer-for-sales through exchanges, of the shares that the Centre holds in companies in which it has a stake of below 60 per cent. These include Indian Oil (current government stake 51.5 per cent), NTPC (54.50 per cent), Bharat Electronics (58.83 per cent), BEML (54.03 per cent), Engineers India (52 per cent), GAIL India (52.66 per cent) and National Aluminum (52 per cent).