Govt moves Calcutta HC to revive Bengal Chemicals' strategic sale

Bengal Chemicals was a loss-making company, but since 2016, it started making profits.

The government is pushing forward with the strategic sale of Bengal Chemicals and Pharmaceuticals Ltd (BCPL), India's oldest pharma PSU (public sector undertaking ), and has initiated legal proceedings to clear hurdles on  its path to privatisation. The Department of Investment and Public Asset Management (DIPAM) and the Ministry of Chemicals and Fertilisers are leading the effort, and have approached the Calcutta High Court for the divestment, a government official told Moneycontrol.

“There are impediments like a court order. Bengal Chemicals was recommended for a strategic sale. It was a loss-making company, but since 2016, it has started posting profits. Buyers are interested only when a company is profitable,” explained the official.

The move is part of the Centre’s broader disinvestment strategy, which includes selling off non-core and non-strategic PSUs. However, BCPL’s divestment has faced legal and administrative hurdles. In 2018, the Calcutta High Court set aside the government’s decision for the strategic sale, citing the importance of public sector enterprises in providing affordable healthcare. The government is now looking to overturn this ruling to proceed with the sale.

“We have already approached the Calcutta High Court, but the case is yet to be listed. Usually, policy decisions can’t be interfered with, but this is a case where the court has intervened. We will await the final decision and then approach the apex court if necessary,” the official added.

BCPL, established in 1901, was nationalised in 1980 due to financial troubles. Despite years of losses, the company turned profitable in 2016-17 and has sustained its financial recovery. The government, which holds a 100 percent stake in BCPL, sees the company as a strong candidate for a strategic sale and expects significant investor interest given its improved financial position.

The government had attempted to privatise BCPL in 2021, but the sale remained stalled due to legal complexities. Officials believe that a favourable court ruling could finally pave the way for BCPL’s privatisation, allowing it to transition into private hands and potentially enhance its operational efficiency and market reach.