Now, BPCL sale bid awaits nod from ministerial group

An inter-ministerial group or IMG comprising representatives from the ministries of finance, petroleum, law, corporate affairs and department of disinvestment has approved Expression of Interest (EoI) and Preliminary Information Memorandum (PIM) for the company.

This will now be put up for approval by ‘Alternative Mechanism’ which is essentially a very small grouping of key Cabinet ministers, sources privy to the development said. The Alternative Mechanism approves reserve or base price as well as price bids.

Once the approval is granted, an EoI seeking interest from potential buyers will be floated, they said, adding the EoI along with PIM was likely to be out in the market within this month.

The Centre plans to sell its entire 53.29 per cent stake in BPCL that will give buyers ready access to 14 per cent of India’s oil refining capacity and about one-fifth of the fuel market share in the world’s fastest-growing energy market. Sources said a two-stage bidding process will be followed wherein request for proposal or RFP in the first stage will be followed by due diligence-cum-bidding by qualified bidders in the second phase.

BPCL has a market capitalisation of about Rs 1.03 lakh crore and the government stake at current prices is worth about Rs 54,000 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the same price.

Sources said BPCL privatisation process may take six to eight months to complete. Privatisation of BPCL is essential for meeting the record Rs 2.1 lakh crore target Finance Minister Nirmala Sitharaman has set from disinvestment proceeds in the Budget for 2020-21.