BPCL disinvestment gets cabinet go ahead; buyers to get management control

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Updated: Nov 20, 2019 10:23 PM

In a mega divestment push, the government on Wednesday approved the strategic disinvestment of five PSUs, including Bharat Petroleum (BPCL).

2 percent tds on cash withdrawl in excess of one crore rupees rule: know what section 194N definesThe government will sell 30.8 per cent in CONCOR along with management control to a strategic buyer, Nirmala Sitharaman added. Image: Reuters

In a mega divestment move, the government on Wednesday approved the strategic disinvestment of five PSUs, including Bharat Petroleum (BPCL). The buyers will get complete management control for BPCL, Finance Minister Nirmala Sitharaman said in a media briefing after the cabinet meeting. However, Numaligarh Refinery will not be disinvested, Nirmala Sitharaman added. Numaligarh Refinery in Assam will be carved out of BPCL before privatisation and will remain a PSU, said Nirmala Sitharaman. BPCL owns 61.65 per cent share of Numaligarh Refinery in Assam. Other than BPCL, the remaining CPSEs included SCI, CONCOR, THDCIL, and NEEPCO. The government also cleared the proposal to reduce its direct holding in these PSUs to below 51 per cent.

The government provided a nod to divest 53.29 per cent stake in BPCL to the strategic buyer. A nod was also provided to sale of stake in THDCIL along with the management control to NTPC, which will be the strategic buyer. Similarly, the government will sell 100 per cent in NEEPCO along with management control to NTPC. In addition, 53.75 per cent in SCI will be divested along with management control to the strategic buyer, the finance minister said. The government will also sell 30.8 per cent in CONCOR along with management control to a strategic buyer, she added.

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This move would help the government to garner the bulk of the budgeted disinvestment receipts. The government has its highest ever divestment target of Rs 1.05 lakh crore in this fiscal. BPCL was the key PSU to achieve its divestment target of which just over Rs 17,000 crore has been met so far. BPCL alone is expected to add over Rs 60,000 crore to the government kitty based on current market cap and the management control is also likley to command some premium. CONCOR and THDC are expected to get in nearly Rs 21,000 crore for the government.

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