Winning Bizness Desk
Mumbai. The union government has withdrawn its offer to sell its entire 52.98% stake in Bharat Petroleum Corporation Limited (BPCL). On behalf of the government, it has been said that most of the bidders have expressed their inability to participate in the privatization process due to the prevailing conditions in the global energy market. The government has set a disinvestment target of Rs 65,000 crore for this year.
Sought EOIs in March 2020
The government had sought Expression of Interest (EOIs) from the bidders in March 2020. There were three bids till November 2020. However, two bidders withdrew due to lack of clarity in fuel pricing, among other reasons. This stopped the privatization of BPCL. The Department of Investment and Public Asset Management (DIPAM) said that several COVID-19 and geopolitical conditions have affected the oil and gas industry globally.
Global energy market conditions not so good
DIPAM said, "Due to the prevailing conditions in the global energy market, most of the QIPs (Qualified Interested Parties) have expressed their inability to continue with the current process of disinvestment of BPCL." In view of this, the Group of Ministers (GOM) on Disinvestment has decided to discontinue the existing EOI process for Strategic Disinvestment of BPCL thereby canceling the EOIs received from QIPs.
When will it restart ?
A decision on restarting the Strategic Disinvestment process of BPCL will be taken based on a review of the situation. Vedanta Group and US venture funds Apollo Global Management Inc and I Squared Capital Advisors had shown interest in buying the government's 53% stake in BPCL. The Narendra Modi government has set a disinvestment target of Rs 65,000 crore for the current fiscal year 2022-23. The government's stake sale in Hindustan Zinc is part of this. The government plans to sell 7.91% stake in ITC. The delay in strategic sale of Pawan Hans, Shipping Corporation of India (SCI), IDBI Bank and BPCL has forced the government to look at other options.
