BP sells 11.5% stake in Castrol India subsidiary

The company said there will be no impact from this financial transaction on staff or customers of Castrol India or its existing contracts

UK-based oil firm BP announced on Thursday its wholly owned subsidiary, Castrol, had sold 11.5 per cent stake from the 71 per cent it held in Castrol India, to domestic and international investors.

BSE-listed Castrol India makes and markets automotive, industrial, and marine lubricants, through 370-odd distributors and more than 80,000 retail outlets. At Thursday's closing price on  the BSE, a 11.5 per cent stake in the company was valued around Rs 2,100 crore.

Bob Dudley, BP group's chief executive, said: "BP remains committed to India and we wish to continue to grow our businesses here, progressing our upstream natural gas developments and our downstream opportunities, including lubricants." Upstream refers to operation stages in the oil and gas industry that involve exploration and production.

The company said there would be no impact from this financial transaction on staff or customers of Castrol India or on its existing contracts. "India is a key market for Castrol, with tremendous growth potential, and is a major element of our global lubricant business.

We will continue to have strategic control of Castrol India and this decision is independent of our upstream investments, which continue to progress. We are investing in India and plan to continue to do so," said Sashi Mukundan, BP head in India.

Castrol India managing director Omer Dormen said they'd had a record performance in 2015, with net profit of Rs 615 crore, a 30 per cent rise from 2014.

"This strong performance has continued in the first quarter of 2016, with post-tax profit of Rs 172 crore. We are in a solid position today and will continue to benefit from our strong brands, enduring relationships and commitment of our staff," he added.

Castrol India has factories at Silvassa, Patalganga and Paharpur. In 2015, net sales from operations were Rs 3,298 crore, profit from operations was up by 25 per cent to Rs 856 crore, and profit after tax was up 30 per cent to Rs 615 crore, from Rs 475 crore the previous year.