Govt calls off EoI process to sell 53% stake in BPCL

30 May 2022


The government has called off an ongoing process of inviting expression of interest for divestment of its entire 52.98 per cent shareholding in Bharat Petroleum Corporation Ltd (BPCL) .as the government’s biggest share sale failed invite investor interest.

According to the Department of Investment and Public Asset Management (DIPAM), after the invitation for EoI, its submission date had to be extended multiple times due to Covid-19 pandemic. Also, a majority of bidders have expressed their “inability to continue in the current process of disinvestment of BPCL. 
BPCL privatisation has been on the divestment target list of the government. It had planned to sell its entire 52.98 per cent stake in BPCL through the strategic disinvestment.
“Multiple Covid-19 waves and geo-political conditions affected multiple industries globally, particularly oil and gas industry. Owing to prevailing conditions in the global energy market, the majority of QIPs have expressed their inability to continue in the current process of disinvestment of BPCL," DIPAM stated in the notification released on Thursday.
DIPAM also said that immediately after the invitation for EoI, the EoI submission date had to be extended multiple times due to COVID-19 pandemic, to address the constraints faced by the potential bidders. “In response to the invitation, multiple EoIs were received from interested parties. Qualified interested parties (QIPs) had initiated due diligence on the company."
“In view of this, based on decisions of the Alternative Mechanism (Empowered Group of Ministers), the Government of India has decided to call off the present EoI process for strategic disinvestment of BPCL and the EoIs received from QIPs shall stand cancelled. Decision on the re-initiation of the strategic disinvestment process of BPCL will be taken in due course based on the review of the situation," the notification said.
DIPAM also cited issues like terms of consortium formation, geopolitical situation and energy transition, besides the transition towards green and renewable fuel fo failure to attract investor interest.
Last month, Anil Agarwal, chairman of Vedanta Resources, one of the suitors for BPCL privatisation, had also said the government had decided not to go ahead with BPCL privatisation plan and that it will come to market with a revised plan. 
Besides Vedanta Group, other buyers who sfwed interest in the stake sale included  Apollo Global Management, and private equity major I Squared Capital-backed Think Gas.
The government invited expression of interest from bidders in March 2020 from selling BPCL and by November 2020 at least three bids had come in.
The government has a divestment target of Rs65,000 crore for the current financial year, 2022-23, as per the Union Budget. For the financial year 2021-22, it had set a disinvestment target of Rs1.75 lakh crore. Out of this, only Rs78,000 crore could be achieved, a shortfall of 55.4 per cent.

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