The central government is seeking to privatize the country's second-largest government refining company, Bharat Petroleum Corporation Limited (BPCL). For this, changes are being considered in the Foreign Direct Investment (FDI) policy. According to sources, the government may allow foreign investors to buy a large stake in BPCL. The government holds a 52.98% stake in BPCL and the government intends to sell its entire stake.
Three companies in India and abroad have submitted expressions of interest ie EoI to buy BPCL. This includes the Vedanta Group and two foreign companies. Foreign companies include Apollo Global Management and I Squared Capital Arm. According to sources, discussions are underway between the Department of Investment and Public Asset Management (DIPAM), the Department for Promotion of Industry and Internal Trade (DPIIT), and the Department of Economic Affairs (DEA) regarding changes in FDI policy.
Currently, 49% of FDI is allowed through automatic routes in public sector petroleum refining companies. Due to this rule, no foreign company can buy more than a 49% stake in BPCL right now. According to sources, DIPAM has recommended a change in the existing FDI policy. DIPAM recommends approving 100% FDI in Central Government companies of Petroleum and Natural Gas sector.
According to sources, DPIIT has proposed to make a separate provision in view of this special situation. Sources say that under the process of disinvestment, proposed changes in FDI policy for investment in BPCL are being considered.
A report quoting the top executives of the company said that BPCL could be privatized by the end of the current financial year i.e. by March 2022. However, everything will depend on the Covid-19 epidemic. Privatization may be delayed if the process is impacted due to Covid. Recently, the government has given potential buyers access to BPCL data.
The central government has set a target of raising 1.75 lakh crore rupees through disinvestment in the current financial year, ie 2021-22. BPCL, Air India's privatization, and Life Insurance of India (LIC) will play a key role in meeting this goal.
Like and Follow us on :
