The Department of Investment and Public Asset Management (DIPAM) is hopeful of completing the sale of government stake in state refiner BPCL by the first half of next fiscal and is working towards that timeline where prospective bidders would be given enough time for due diligence.
Officials say as of now there is no major hindrance to that timeline and once the ''Alternative Mechanism'' comprising Cabinet ministers from Finance, Road Transport and the administrative ministry under which the PSU comes (oil ministry) approves it, the Performance Information Memorandum and Expression of Interest will be out. The 'Alternative Mechanism' approves reserve or base price as well as price bids.
The inter-ministerial group (IMG) comprising representatives from the ministries of finance, petroleum, law, corporate affairs and department of disinvestment has already approved Expression of Interest (EoI) and Preliminary Information Memorandum (PIM) of the company.
The sale is likely to go through a two-stage bidding process, with the invitation of request for proposal or RFP in the first stage followed by due diligence-cum-bidding by qualified bidders in the second stage.
The Cabinet Committee for economic affairs (CCEA) had already approved the BPCL stake sale in November last year, following which an inter-ministerial group (IMG) was constituted. The IMG subsequently turn appointed advisers for the transaction, including merchant bankers, asset valuers, and legal advisers.
As of now, the Cabinet approval is only for keeping Assam-based Numaligarh Refinery Ltd out of the divestment. For other JVs of BPCL, it is understood that BPCL's stake in those JVs and subsidiaries will be taken up by the private company which acquires the government stake, said sources adding if other JVs were to be kept out of privatisation, then oil ministry would vet them earlier before going to the Cabinet for approval for stake sale.
The government plans to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation to a private investor. As an indication of BPCL's share price range, the government expects to get about Rs 60,000 crore from selling its stake in the refiner. The target for disinvestment in FY21 is Rs 2.1 lakh crore.
BPCL has about 14 per cent of India's total refining capacity of 249.4 million tonnes and about one-fifth of the fuel market share in the world's fastest-growing energy market.
BPCL has a vast retail distribution network. It owns 15,177 petrol pumps and 6,011 LPG distributor agencies in the country. Besides, it has 51 LPG (liquefied petroleum gas) bottling plants.
The company distributes 21 per cent of petroleum products consumed in the country by volume as of March this year and has more than a fifth of the 250 aviation fuel stations in the country.
(With Inputs From IANS)
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