BPCL gains after board OKs stake sale in NRL

Bharat Petroleum Corporation (BPCL) rose 2.18% to Rs 464.80 after the company said its board has approved sale of 61.65% stake in Numaligarh Refinery (NRL) to a consortium of Oil India and Engineers India and to the Government of Assam.

The company will sell 45.35 crore equity shares, or 61.65% equity, in NRL for Rs 9,875.96 crore. If the Government of Assam does not participate in the acquisition of the stake, the consortium of Oil India (OIL) and Engineers India (EIL) will buy the stake.

The sale is expected to be completed within a month from obtaining all requisite approvals, BPCL said in a regulatory filing made after market hours yesterday. The final sale pact will be entered into after obtaining clearances from its shareholders, BPCL said.

NRL is primarily engaged in the business of refining of petroleum products. NRL is the largest customer of OIL's crude produced from its North Eastern fields. The acquisition is expected to improve the synergy in OIL's portfolio.

The consolidated total income of NRL for the financial year ended 31 March 2020 was Rs 14,244.29 crore, or 4.29% of consolidated total income of BPCL for the financial year 31 March 2020.

NRL has been conferred the status of Mini Ratna PSU. Currently, BPCL holds 61.65% stake, Government of Assam holds 12.35% stake and OIL holds 26% stake in NRL.

BPCL operates in refinery and marketing activities, which includes downstream petroleum sector. The Government of India holds 52.98% stake in BPCL as of 31 December 2020. Its net profit surged 120.3% to Rs 2,777.62 crore on 10.7% decline in net sales to Rs 66,731.39 crore in Q3 FY21 over Q3 FY20.

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