Govt expected to soon issue EoIs for BPCL, Shipping Corp, Concor

The Centre is expected to issue the expression of interest (EoI) and preliminary information memorandum (PIM) to invite prospective buyers for its stake in Bharat Petroleum within days. This will be followed by the issuance of EoI and PIM for the strategic sale in Container Corp and then Shipping Corp.

The process is set to be completed by mid-March, Business Standard has learnt.

This means that by the time fiscal year 2020-21 (FY21) begins on April 1, the stake sale will be well underway. Senior officials in the Department of Investment and Public Asset Management (Dipam) are confident that the Centre will be able to privatise BPCL, Concor, Shipping Corp and Air India in the first half of the next fiscal year.

This confidence was echoed by Dipam Secretary Tuhin Kanta Pandey on Friday at a post-Budget meeting at the NITI Aayog between government officials and financial sector experts, where he reiterated his belief that the privatisation of the firms would be completed in the first half of FY21.

“The EOI for BPCL will be issued within days. Only the clearance from the Alternative Mechanism for strategic sales remains,” said a senior official. The deal will include BPCL’s stake in all assets, except the Numaligarh Refinery, which has been kept out of the deal, the person said.

• BPCL or Air India to be the first company divested through e-auction

• Cancelled roadshows in Far East not to impact FY20 divestment plans

• Roadshows for IRFC IPO, NMDC and SAIL OFS to be held via video-conference

• Govt confident that strategic sale of BPCL, Concor, Shipping Corp,Air India can be completed by H1FY21

“With Concor, the only detail that needs working out is the terms under which the Indian Railways will lease land to the prospective buyer. Once that is finalised, the EOI will be issued, as it will contain those details and Concor’s valuation depends on that,” the official said. The storage facilities and warehouses where Concor stores containers are on lands that belong to Railways.

After that, by March 15, Shipping Corp’s EOI and PIM will likely be issued. The road shows for the company are still pending, the person said. The possible destinations include Singapore, Dubai, and major shipping industry destinations in Europe.

Additionally, either BPCL or Air India will be the first company whose stake sale will be carried out through the new e-bidding platform that has been set up for divestment, a second official said. This shift to an online medium is expected to streamline the process and make it transparent.

Moreover, for FY20, officials said the revised divestment plans will not be derailed because of cancelled road shows in the Far East over fears of Coronavirus. The cancelled road shows — for the initial public offering of Indian Railway Finance Corporation (IRFC) and offers-for-sale of National Mineral Development Corporation (NMDC) and Steel Authority of India (SAIL) — will be held through videoconferencing, and these three public issues are expected to happen before March 31.

The disinvestment target for FY21 has been set at Rs 2.1 trillion. This is over double the Rs 1 trillion that Dipam garnered in FY18. For FY20, Finance Minister Nirmala Sitharaman pegged a target of Rs 1.05 trillion. This was reduced to Rs 65,000 crore in the latest Union Budget. Around Rs 35,000 crore has already been garnered so far for FY20, Dipam officials said.

Out of the Rs 2.1 trillion budgeted for FY21, around Rs 90,000 crore is expected to come from sale of Centre’s stake in financial sector companies like IDBI Bank and Life Insurance Corporation. A bulk of the remaining Rs 1.2 trillion is expected to come from the privatisation of the four large PSUs.

The government will offload its entire 53.29 per cent stake in BPCL, 63.75 per cent stake in Shipping Corp and 100 per cent stake in Air India. It will offload 30.8 per cent stake in ConCor, in which its total stake is around 54.8 per cent.