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Oil India to pick up BPCL stake in Numaligarh refinery this fiscal

Out of the total 61.65 percent BPCL stake in NRL, around 48 percent will be sold to a consortium led by OIL and Engineers India, while another 13.65 percent will be given to the government of Assam.

February 05, 2021 / 03:58 PM IST
Bharat Petroleum Corporation | In the last 5 trading sessions the share price was down 10.03 percent from Rs 346.80 to Rs 312 (May 5 to May 12). Market capitalisation stands at Rs 11,593.99 crore.

Bharat Petroleum Corporation | In the last 5 trading sessions the share price was down 10.03 percent from Rs 346.80 to Rs 312 (May 5 to May 12). Market capitalisation stands at Rs 11,593.99 crore.

In an effort to boost investor confidence ahead of privatisation of Bharat Petroleum Corporation (BPCL), the oil marketing major's stake in Numaligarh Refinery (NRL) is expected to be sold to Oil India (OIL) and the government of Assam within this financial year.

As per the plan, out of the total 61.65 percent BPCL stake in NRL, around 48 percent will be sold to a consortium led by OIL and Engineers India, while another 13.65 percent will be given to the government of Assam. "We are in the process of finalising the deal. It may happen within this financial year," said a source aware of the development. OIL already holds 26 percent equity in the company, while the government of Assam has around 12.35 percent. The value for 61.65 percent stake in NRL is reportedly around Rs 7,000 crore.

The sale of NRL is considered to be the first step towards disinvestment of BPCL. The government has already indicated that it expects the completion of the privatisation of BPCL by the first half of the financial year 2021-22. The sale of BPCL is expected to be key in achieving the Rs 1.75 lakh crore disinvestment target set for the upcoming financial year. Already, Anil Agarwal-led Vedanta Group and private equity players like Apollo Global, and I Squared Capital have expressed their interests in BPCL.

"We want to create more value for the investors. Hence, the stake sale in NRL will happen prior to the BPCL deal," he said. The Assam-based company is in the process of expanding its refining capacity from 3 million tonnes per annum (MTPA) to 9 MTPA at an investment of Rs 22,594 crore. The project is expected to be completed by 2024. The expansion also involves setting up of crude oil pipeline from Paradip to Numaligarh and product pipeline from Numaligarh to Siliguri.
Shine Jacob
first published: Feb 5, 2021 03:58 pm

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