Disinvestment of Bharat Petroleum Corporation of India
| Case Code: FINC178 Case Length: 12 Pages Period: 2019-2021 Pub Date: 2021 Teaching Note: Available |
Price: Rs.300 Organization: Bharat Petroleum Corporation of India (BPCL) Industry: Government Countries: India Themes: Fiscal Policy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Disinvestment Proposal
In 2019, the GoI announced disinvestment of BPCL as part of its strategy to meet the target of covering fiscal deficit by raising Rs. 2.1 trillion. (Refer to Exhibit-1 for the Disinvestment Policy of the GoI). Other companies which were to be sold as a part of the disinvestment plan announced in November 2019 were Shipping Corporation of India, Container Corporation of India, Tehri Hydro Development Corporation India Ltd (THDC), and North Eastern Electric Power Corporation Limited..
Issues and Challenges
The GoI had been facing the challenge of low interest from the peers of BPCL toward acquisition of a stake in the company. There was an expectation that global oil competitors like British Petroleum, Total, Rosneft, ADNOC, and Saudi ARAMCO would take part in the bidding process for BPCL. However, there were Expressions of Interest only from Vedanta Group, and two American funds—Apollo Global and I Squared Capital– as of January 2021. The lower interest among potential bidders was expected to result in a lower valuation of the shares of BPCL..
Exhibits
Exhibit I: Disinvestment Policy of Government of India
Exhibit II: Profit and Loss Account of BPCL as on March 31, 2020
Exhibit-III: Balance Sheet of BPCL as on March 31, 2020
Exhibit-IV: BPCL Acquisition of BORL
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