Govt invites EOI to sell entire stake in BPCL; $10 billion net worth must for bidding

Modi government on Saturday invited bids for the sale of Bharat Petroleum Corp Ltd (BPCL) as a part of its biggest ever privatisation drive. Ministry of Petroleum and Natural Gas (MoPNG), which holds around 1.15 crore equity shares, nearly 52.98 per cent of total stake in the country's second-biggest oil refiner, has proposed disinvestment of its entire stake. BPCL's privatisation drive is an essential part of Finance Minister Nirmala Sitharaman's disinvestment target of Rs 2.1 lakh crore.

Expressions of Interest (EoI) for BPCL's strategic disinvestment have been invited by May 2, as per the preliminary memorandum issued by the Ministry of Finance's Department of Investment & Public Asset Management.

The bid document also proposed to transfer the management control to a strategic buyer (except BPCL's equity shareholding of 61.65 per cent in Numaligarh Refinery Limited (NRL), and management control thereon.

"The government of India is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 114.91 crore equity shares, which constitutes 52.98% of BPCL's equity share capital along with transfer of management control to a strategic buyer (except BPCL's equity shareholding of 61.65% in Numaligarh Refinery Limited)," it said.

DIPAM has appointed Deloitte Touche Tohmatsu India as transaction adviser and to provide advisory services and managing the disinvestment process for the proposed transaction.

The bidding process for the transaction will be completed in two-stages -- stage I and stage II. Stage I is to select eligible bidders and Stage II is for making a financial bid. Public sector undertakings (PSUs) "are not eligible to participate" in the privatisation drive.

Any private company with a net worth of over $10 billion is eligible for bidding and consortium of no more than four firms will be allowed to bid, said the memorandum.

BPCL will give interested buyers access to around one-fourth of the fuel market share in the world's fastest-growing energy market and 14 per cent of India's oil refining capacity.

BPCL's m-cap of around Rs 87,388 crore and the government stake is about Rs 46,000 crore. Additionally, the successful bidder will have to make an open offer to other shareholders for acquiring another 26 per cent of stake.

BPCL's four refineries in Maharashtra, Kerala, Madhya Pradesh and Assam have a combined capacity of 38.3 million tonnes per annum, 15 per cent of the country's total refining capacity. In terms of volume, BPCL distributes around 21 per cent of petroleum products in India as of March 2020.

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