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NEW DELHI :
India is contemplating promoting as much as 1 / 4 of state-run refiner Bharat Petroleum Corp Ltd after failing to draw suitors for the entire agency, two officers mentioned, as the federal government’s divestment programme strikes slower than anticipated.
New Delhi is contemplating inviting bids for a 20%-25% stake in BPCL, as an alternative of an outright sale of its total 52.98% holding, the 2 authorities officers, who declined to be named, advised Reuters.
The officers mentioned discussions concerning the plan had been within the early levels.
Initially, the federal government had aimed to lift $8-$10 billion from promoting its full stake in BPCL. Having drawn up plans 4 years in the past, it invited bids in 2020, hoping main gamers comparable to Russia’s Rosneft is perhaps .
However Rosneft and Saudi Aramco didn’t bid, as low oil costs at the moment and weak demand curbed their funding plans.
The federal government officers mentioned even a component sale of BPCL was unlikely to be accomplished this fiscal 12 months as the method would take over 12 months.
Sale prospects had been hit by inconsistent insurance policies on petrol and diesel costs, considered one of them mentioned.
“There have been many points however most not too long ago petrol costs not being raised for 4 months between November and February had been presumed as a consequence of elections by the federal government,” the official mentioned.
India had elections in 5 states together with the bellwether Uttar Pradesh in February and pump costs solely began shifting up from March 22, by which period Prime Minister Narendra Modi’s Bharatiya Janata Social gathering had received in 4 out of 5 states.
The present dialogue started in spite of everything bidders had withdrawn from the method final month, each officers mentioned.
Non-public fairness agency Apollo World Administration and oil-to-metals conglomerate Vedanta Group had been the ultimate bidders, they mentioned.
The federal government, Vedanta and BPCL didn’t instantly reply to emails in search of remark. Apollo Group declined to remark.
The backtracking on BPCL’s full stake sale is symptomatic of gradual progress within the authorities’s privatisation plans.
In 2020, Finance Minister Nirmala Sitharaman introduced plans to privatise most state-run corporations, together with banks, mining corporations and insurers.
However little progress has been made, and each officers mentioned the federal government had deferred plans to promote some other banks this fiscal 12 months other than IDBI Financial institution, which is majority owned by Life Insurance coverage Corp of India. LIC sank on its market debut on Tuesday after the federal government bought a 3.5% stake.
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