BPCL falls 6% on report that government may revisit privatisation plan

Shares of Bharat Petroleum Corporation Limited (BPCL) dipped 6 per cent to Rs 370.50 on the BSE in Monday’s intra-day trade on reports that the government may revisit the company’s privatisation plan, including revision of the terms of sale. The transition towards green and renewable fuel has made privatisation difficult in existing terms, a PTI report said quoting government officials.

The government, which currently holds 52.98 per cent stake in the oil marketing company, is planning to sell its entire stake for which three expressions of interest (EoIs), including one from billionaire Anil Agarwal-led Vedanta Group, have been received.

The government was to seek financial bids once bidders completed due diligence and the terms and conditions of the share purchase agreement were finalized, PTI reported. CLICK HERE FOR FULL REPORT

That said, in an interview with Moneycontrol, Anil Agarwal, chairman of Vedanta Resources said that the government has decided not to go ahead with the privatisation plan of state-run BPCL and has told its suitors that it will revise the plan and come to market.

Meanwhile, in the past one month, the stock of BPCL has outperformed the market by gaining 3 per cent, as compared to 1 per cent decline in the S&P BSE Sensex. However, over the past six months, it has slipped 14 per cent, as against 7 per cent fall recorded by the benchmark index.

Analysts at HDFC Securities have a ‘BUY’ rating on BPCL, with a target price of Rs 420, given that it has corrected around 30 per cent from its peak over the last six months, owing to pressure on auto-fuel marketing margins and an increase in LPG under-recoveries.

“We believe the recent correction is overdone, and see limited downside from current levels, led by improvements in refining margins, resumption of daily auto-fuel price changes, and a gradual reduction in LPG under-recoveries,” the brokerage firm had said in a March 21, 2022 report.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor