BPCL scales fresh 52-week high as Cabinet okays divestment, retreats later

Shares of Bharat Petroleum Corporation Limited (BPCL) slid over 2 per cent to Rs 531.20 on the BSE on Thursday after the Cabinet approved the strategic disinvestment of the government's entire 53.29 per cent stake in the firm. The stock opened almost a per cent higher to hit its fresh 52-week high level of Rs 549.70 before reversing its direction.

While announcing the decisions in a post-Cabinet meeting media briefing on Wednesday, Finance Minister Nirmala Sitharaman said privatisation of BPCL will be without the company’s equity shareholding of 61.65 per cent in Numaligarh Refinery in Assam. Numaligarh Refinery is the largest producer of paraffin wax in the country -- the GRM of NRL during FY19 was seen at $11.8 a barrel.

At 9:54 am, BPCL was trading 2.32 per cent lower at Rs 532.10 compared to the benchmark S&P BSE Sensex which was trading absolutely flat. A total of 72.13 lakh shares of BPCL had changed hands on the BSE and NSE combined.  

Apart from BPCL, the Cabinet also approved divestment of its stake from Shipping Corp, THDC India, and NEEPCO, and most of its stake in Container Corporation of India (CONCOR).

The government will offload its entire 53.29 per cent stake in BPCL, 63.75 per cent stake in Shipping Corp, and 30.8 per cent stake in Container Corp. The Centre owns 54.8 per cent stake in CONCOR. The government will also give up management control in these companies.

READ MORE: BPCL most lucrative among govt's divestment candidates, say analysts

Consequently, CONCOR jumped 4.6 per cent to Rs 605 on the BSE today while Shipping Corporation of India slid 5.2 per cent to Rs 64.80.

Sitharaman also said NTPC will buy the Centre’s entire stake in two unlisted companies, THDC India and NEEPCO. The Centre owns 74.23 per cent in THDC, with the rest owned by Uttar Pradesh. It owns 100 per cent stake in NEEPCO.

These major divestment decisions were taken even as the government races against time to meet its highest ever divestment target of Rs 1.05 trillion for 2019-20. The Centre hopes that disinvestment proceeds will make up for some of the revenue shortfall that is expected this year.