BPCL gets 3 to 4 offers; Dependency skips, there is no supermajor in the race

The government received “ multiple ” offers on Monday to buy its stake in India’s second-largest fuel retailer BPCL, but Reliance Industries from billionaire Mukesh Ambani, as well as super majors Saudi Aramco, BP and Total, did not submit any offers.

Tuhin Kanta Pandey, secretary of the Department of Investment and Management of Public Assets (DIPAM), which is handling the strategic sale, tweeted that the transaction advisers for the sale of the 52.98 percent government stake in Bharat Petroleum Corp Ltd ( BPCL) have reported receiving “multiple expressions of interest”.

“The transaction will move to the second stage after scrutiny by TA,” he said.

TA stands for Transaction Advisor.

“BPCL’s strategic divestment is progressing: it now moves to the second stage after multiple expressions of interest have been received,” Finance Minister Nirmala Sitharaman also tweeted.

However, none of them gave the number of offers received or the names of the bidders.

Separately, four industry officials said 3-4 offers have been submitted.

Reliance Industries, which was considered a potential bidder as BPCL would have added a 22% share of the fuel market to its fledgling retail business and made it the number one oil refiner in the country, did not express an expression of interest ( EoI) at the close of the deadline on Monday.

The Saudi Arabian Oil Company (Saudi Aramco), which had been eager to enter the world’s fastest-growing fuel market, also did not file an EoI.

UK’s BP plc and Total of France, which have plans to enter the Indian fuel market, had previously been ruled out of the BPCL race as they did not want to add oil refining assets when the world was shifting away from them. liquid fuels.

A handful of private equity funds and / or pension funds are said to have conducted an EoI.

Nayara Energy, led by Russian energy giant Rosneft, which operates a 20 million tonne oil refinery at Vadinar in Gujarat and also has 5,822 gasoline pumps, was considered a potential bidder for BPCL, but reports last month they had indicated that he was no longer interested.

Abu Dhabi National Oil Co (ADNOC), which has ambitions for the Indian market, was also considered a potential bidder, but it was not immediately known whether it had submitted an EoI.

Mining billionaire Anil Agarwal is considered another potential bidder given his interest in the oil and gas business with the $ 8.67 billion acquisition of Cairn India.

The sources said that the transaction advisers will now evaluate the bidders to determine if they actually meet the qualification criteria and if they would have the financial power to make the acquisition.

This process can take 2-3 weeks, then the Request for Proposal (RFP) will be issued and financial offers will be sought.

At Friday’s closing price of Rs 412.70 on BSE, the government’s 52.98 percent stake in BPCL is worth Rs 47,430 crore. In addition, the acquirer would have to make an open offer to buy another 26 percent stake from the public, which would cost Rs 23,276 crore.

BPCL will give the buyer 15.33 percent ownership of India’s oil refining capacity and 22 percent of the fuel trading share.

The privatization of BPCL is essential to meet the record goal of Rs 2.1 crore lakh that the finance minister has set from the proceeds of divestment in the 2020-21 budget.

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 year, which is 15.3 percent of capacity. India’s total refining of 249.8 million. ton.

While the Numaligarh refinery will be extracted from BPCL and sold to a power source, the company’s new buyer will get 35.3 million tons of refining capacity: 12 million tons of Mumbai unit, 15.5 million tons from Kochi refinery and 7.8 million tons from Bina.

It also has 17,138 gasoline pumps, 6,151 LPG distribution agencies and 61 of the 256 aviation fuel stations in the country.

BPCL is India’s second largest oil trading company with independent domestic sales volume of more than 43.10 million tonnes and 22 percent market share during fiscal 2020. It is the sixth largest company India’s largest by turnover.

Its gasoline pumps sell more fuel than the industry average – BPCL pumps sell 124 kiloliters per month compared to the industry average of 116, according to the company’s website.

The firm also has an upstream presence with 26 assets in 9 countries such as Russia, Brazil, Mozambique, the United Arab Emirates, Indonesia, Australia, East Timor, Israel and India. It is also venturing into urban gas distribution and has licenses for 37 geographic areas (GA).