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Cabinet to approve 100% FDI in BPCL to boost divestment process

Opening up FDI in the state-run company will broaden its bidder pool and improve chances of quick privatisation.

July 22, 2021 / 11:22 AM IST
The Centre had in 2019 placed on a sale its 53 percent stake in BPCL. National carrier Air India, Shipping Corporation of India, and BPCL are some of the major disinvestments lined up for fiscal year 2021-22.

The Centre had in 2019 placed on a sale its 53 percent stake in BPCL. National carrier Air India, Shipping Corporation of India, and BPCL are some of the major disinvestments lined up for fiscal year 2021-22.


The Union Cabinet is set to approve 100 percent foreign direct investment (FDI) in Bharat Petroleum Corporation (BPCL), sources told CNBC Awaaz on July 22.

The move will be a "booster for the divestment process", the report noted.

Notably, private refineries are allowed to have complete FDI, while PSU are subject to the 49-51 shareholding structure with the government holding majority stake. Notably, the government is seeking to completely exit the state refiner.

Approval for 100 percent FDI in BPCL would thus require a few tweaks in the rules or exceptions to be made, CNBC Awaaz noted.

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Opening up FDI in the state-run company will broaden its bidder pool and improve chances of quick privatisation.

Notably, the Centre has decided to disinvest its entire holdings in BPCL to a private company as part of its asset monetisation plan. The winning private bidder, foreign or domestic, will eventually end up acquiring not only the refining and marketing assets of BPCL but also all the exploration assets.

The government is doing all it can to improve prospects of its divestment targets this year. Reports have also emerged that the Centre may tweak benefits of Air India employees to appeal to bidders.
Moneycontrol News
first published: Jul 22, 2021 11:22 am

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