Oil Minister Dharmendra Pradhan on Friday said there is no going back on the decision to privatise the country's largest oil marketing company BPCL in view of the slump in global energy prices.
Speaking at the BNEF Summit, he however said the timing of the privatisation would be decided by the finance ministry.
"Whether the government is revisiting disinvestment of BPCL, my answer is very clear no. The government is very firm on one issue (that) government has no business to be in the business," he said.
The government had in November last year decided to sell its 52.98 per cent stake in Bharat Petroleum Corp Ltd (BPCL). It has sought expressions of interest (EoIs) from potential acquirers by July 31.
"What decision we have taken on BPCL, we are firm on that," Pradhan emphasised.
Stating that the last date of submitting EoIs stands at July 31 as of now, he said the actual timing of the sell-off will depend on the market.
"My colleague Finance Minister Nirmala Sitharaman and DIPAM is looking into that (timing of the sale). They will take an appropriate decision looking at the market scenario. But the primary decision of disinvestment of BPCL stands," he said.
BPCL will give buyers ready access to 15.3 per cent of India's oil refining capacity and 22 per cent of the fuel market share in the world's fastest-growing energy market.
BPCL has a market capitalisation of about Rs 85,316 crore and the government stake at current prices is worth about Rs 45,200 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the same price.
Privatisation of BPCL is essential for meeting the record Rs 2.1 lakh crore target the finance minister has set from disinvestment proceeds in the budget for 2020-21.
BPCL operates four refineries in Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh), and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15.3 per cent of India's total refining capacity of 249.8 million tonnes.
While the Numaligarh refinery will be carved out of BPCL and sold to a PSU, the new buyer of the company will get 35.3 million tonnes of refining capacity.
BPCL also owns about 16,309 petrol pumps and 6,113 LPG (liquefied petroleum gas) distributor agencies in the country. Besides, it has 51 LPG bottling plants.
The company distributes 22 per cent of petroleum products consumed in the country by volume as of March this year and has more than a fifth of the 256 aviation fuel stations in India.
The government has appointed Deloitte Touche Tohmatsu India LLP as its transaction advisor for the strategic disinvestment process.
The government of India is proposing strategic disinvestment of its entire shareholding in BPCL comprising of 114.91 crore equity shares, which constitutes 52.98 per cent of BPCL's equity share capital, along with transfer of management control to a strategic buyer (except BPCL's equity shareholding of 61.65 per cent in Numaligarh Refinery Ltd), the notice inviting offer said.
The bidding will be a two-stage affair, with qualified bidders in the first EoI phase being asked to make a financial bid in the second round.
Public sector undertakings (PSUs) "are not eligible to participate" in the privatisation, the offer document said.
Any private company having a net worth of USD 10 billion is eligible for bidding and consortium of not more than four firms will be allowed to bid, it said.
According to the bidding criteria, the lead member of the consortium must hold 40 per cent stake and others must have a minimum net worth of USD 1 billion.
Changes in the consortium are allowed within 45 days, but the lead member cannot be changed, it added.
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