Mumbai: Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co. are among companies that have had conversations with the government on asset sales and are likely to bid for the government’s stake in Bharat Petroleum Corp. Ltd, two people aware of the matter said.

Shares of Bharat Petroleum Corporation (BPCL) climbed as much as 5.54 per cent to Rs 517.45 apiece on the BSE in the intra-day deals on Wednesday. The stock spurted after news reports suggested energy giant Saudi Aramco is likely to express its interest in the strategic sale of BPCL.

The Modi government’s plan to privatise BPCL hasn’t received an enthusiastic response from prospective buyers. News reports suggest that Mukesh Ambani-led Reliance Industries is unlikely to bid for India’s second largest fuel retailer. Apart from the UK-based BP that gave a measured response to the sale offer, no international oil company has expressed interest in buying BPCL after a group of secretaries approved the sale of the government’s 53.29 per cent stake last month.

The recent outperformance of BPCL against other OMCs is pricing in upside from a potential open offer in lieu of control premium that maybe paid by a strategic buyer in a scenario of privatisation. Our reverse valuation also suggests that the market has already ascribed 10X EV/Ebitda to BPCL’s marketing business, at a premium to global M&A in the fuel retailing business, while ignoring differences with developed markets. Reiterate ‘Sell’ amid adverse risk-reward balance.

Moody’s Investors Service on Thursday said if a non-government firm takes over the entire government stake in BPCL, it would likely downgrade the state-run oil marketing company by two notches to Ba1, which denotes medium-grade and is subject to moderate credit risk. Whether BPCL is to be privatised or sold to another PSU, the proposed stake sale of 53.29% government stake in the company will prompt bond redemption and attendant refinancing risks, the rating agency added.

The government wants to start the process of the strategic sale, or privatisation, of BPCL by the end of November and complete the exercise before the end of this fiscal. The PSU is likely to draw the attention of global giants such as Saudi Aramco and Abu Dhabi National Oil Company (Adnoc), who are keen to enter the world's fastest-growing fuel retail market.

Carrying forward its divestment plan, the government is mulling over stake sale in the five central public sector enterprises (CPSEs), CNBC TV18 reported citing unidentified sources. The government may seek cabinet nod for strategic stake sale in the state-owned BPCL, CONCOR and SCI, the report added. In addition, approval will also be sought for acquisition of THDC by NTPC and NEEPCO by NHPC, it also said.

New Delhi: India aims to sell two or three state-owned firms to local or foreign firms to raise up to ₹60, 000 ($8.5 billion) by March 2020, a senior Finance Ministry official said on Monday.

The government planned to sell Bharat Petroleum Corp Ltd, logistics firm Container Corp of India Ltd and debt-laden Air India before the end of the 2019/20 financial year, the official, who asked not to be named, told reporters.

Mumbai: Bharat Gas Resources Ltd (BGR) a wholly-owned subsidiary of Bharat Petroleum Corporation Ltd (BPCL), has signed a five-year loan agreement with Bank of Baroda for ₹3100 crore, according to two officials aware of the deal.

The company will use the loan to fund expansion of its city gas distribution business. BGRL has a board approved borrowing limit of ₹4000 crore.

The government has set a tall divestment target of ₹1.05 trillion for FY20. Needless to say, it would need to sell stakes in some of the large public sector companies to achieve the target.

Here, state-run oil marketing and refining company, Bharat Petroleum Corp. Ltd (BPCL), seems to be on the radar.

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