BPCL surges 14% in 2 days as global oil giants show interest in the company

Shares of Bharat Petroleum Corporation (BPCL) rose 7 percent to Rs 421 on the BSE on Friday. The stock has risen 14 percent in the past two trading days. It reflects the reports that global oil giants are showing interest in the state-owned oil marketing company.

There are more-than-doubled trading volumes with a combined around 16 million equity shares changing hands on the BSE and NSE till 11:36 am. Two other state-owned oil market companies – Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) – were trading higher by 6 percent and 2 percent, respectively. In comparison, the S&P BSE Sensex was up 0.54 percent at 36,667 points.

Saudi Aramco, Rosneft, Exxon Mobil, Abu Dhabi National Oil Co (ADNOC), and one Indian private player will be participating in the bidding process for BPCL, according to media reports. The sale of BPCL to a major private entity will unlock value for minority shareholders.

The deadline for submitting Expressions of Interest (EoIs) has been postponed twice and the current deadline ends on July 31. The Department of Investment and Public Asset Management (DIPAM) had released the Preliminary Information Memorandum (PIM) in March for inviting EoI for the strategic disinvestment of BPCL with the transfer of management control.

The Government of India has proposed strategic disinvestment of its entire shareholding in BPCL comprising of 1,149 million equity shares, which constitutes 52.98 percent of BPCL’s equity share capital along with transfer of management control to a strategic buyer (except BPCL’s equity shareholding of 61.65 percent in Numaligarh Refinery Limited). NRL would be transferred to an Oil & Gas CPSE separately.

The government has barred Public sector undertakings from bidding for BPCL. The government expects private sector Indian players and global MNCs to bid for its stake.