Singh said it was still not clearly stated what was being offered. “There are media reports that Numaligarh Refinery may be carved out. Let it come and then we will see.” He was speaking on the sidelines of the launch of Purvodaya, an integrated steel hub.
He added it was internally discussed and there were advantages either way. If IOC bags it, there are advantages. In the event it doesn’t, there would still be advantages and its capital expenditure (capex) would not get saturated. IOC had its own capex plan, which it would then be free to pursue.
In November, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of government stake in five major public sector undertakings (PSUs): BPCL, Shipping Corporation of India, Container Corporation of India, THDC India (formerly Tehri Hydro Development Corporation), and North Eastern Electric Power Corporation. The government would be handing over management control in each of these divestments to a strategic buyer.
BPCL, however, is the most lucrative on the government’s disinvestment list. At the current trading price, the government’s 53.29 per cent stake in BPCL is valued at close to Rs 54,400 crore. The government proposes to raise Rs 1.05 trillion from disinvestment in the current financial year and BPCL would be crucial to achieving the target.
Dharmendra Pradhan, Minister of Petroleum and Natural Gas, had said after the CCEA decision that there was a clear vision since 2014 that the government had no business to be in business, in response to questions on whether PSUs would be allowed to bid for the government’s stake in BPCL.
IOC, however, has precedence over bidding aggressively in the past.
In 2002, IOC had bagged the government’s 33 per cent stake in IBP. IOC’s bid was Rs 1,153.68 crore, which translated into Rs 1,551 a share. The other bidders for IBP were Reliance Industries, Reliance Petroleum, Royal Dutch Shell, Kuwait Petroleum Corporation, BPCL, and Hindustan Petroleum Corporation. The reserve price for IBP was Rs 337 crore.