BPCL sinks 4% as Vedanta head Anil Agarwal says divestment paused

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The share price of Bharat Petroleum Corporation of India (BPCL) slumped more than 4 percent in the morning trade on April 25 after Vedanta Group’s Chairman Anil Agarwal said the government had called off the divestment of the state-owned company.

Agarwal told Moneycontrol, “It (divestment) will not happen. They’ve said that they have withdrawn the offer, they will come back with a new strategy."

“Generally, they have given a statement, they're not going ahead. Not in this format.”

The development is a setback for BPCL, which had seen strong interest from retail and institutional investors over the past few years in the hope that the privatisation of the state-owned refiner would trigger a sharp improvement in its financials and capital allocation.

The government had announced the strategic divestment of BPCL in the Union Budget 2019, with the cabinet clearing the stake sale in the November of the same year.

The onset of the COVID-19 pandemic in 2020 was the first major setback for the divestment process, as global crude prices plummeted amid national lockdowns across major economies.

While the divestment process picked up pace in 2021 amid a booming stock market and recovery in the global economy, however, critical issues around the sector, including flexibility around retail fuel pricing, have dampened the interest of major oil industry participants.

At 10.10 am, shares of BPCL were down 4.3 percent at Rs 376.5 on the National Stock Exchange.