BPCL disinvestment process slows down due to pandemic, LIC IPO: Report

India’s plan to sell a majority stake in the country’s second-biggest state refiner has slowed down amid the coronavirus pandemic and other government initiatives such as the initial public offering of the nation’s biggest insurer, according to people familiar with the matter.

The discussions with investors on the stake sale of Bharat Petroleum Corp., from which the government could fetch about $6.9 billion, haven’t progressed much recently, the people said. The disposal may only take place as soon as early next year rather than in 2020, one of the people said, asking not to be identified as the matter is private.

India has already allowed bidders access to the financial data of the refiner in April and some have held meetings with BPCL management, Bloomberg News reported in May. The government’s 53% stake in the refiner is valued at about Rs 51,500 crore ($6.9 billion) based on Friday’s closing price.

While discussions have slowed down, the divestment plan isn’t formally stalled and suitors are still working on potential bids, the people said. A representative for the finance ministry didn’t immediately respond to requests for comment, while a representative for BPCL declined to comment.

While the BPCL privatisation is part of the country’s efforts to raise capital to make up the fall in tax revenues as the pandemic hit the economy, the administration could well have other priorities including Life Insurance Corp. of India’s IPO, which could be the country’s largest-ever.

The government last week asked banks to pitch for roles managing LIC’s share sale, adding its size could be “far larger than any precedent” in Indian markets. The listing of the state-owned insurer could happen as soon as March 2022, Bloomberg News reported in June.

Coronavirus second wave hit India in April, slamming businesses and jobs with ensuing lockdowns just as the economy began to recover from the initial onset of the pandemic last year. The South Asian country recorded a total of 413,609 deaths, according to the latest data collected by Bloomberg News and Johns Hopkins University.