Shares of state-run oil giaint BPCL slumped from 52-week high on Thursday morning, after the Narendra Modi-led government announced its mega privatisation bid.
Shares of state-run oil giaint BPCL slumped from 52-week high on Thursday morning, after the Narendra Modi-led government announced its mega privatisation bid. BPCL share price tanked by more than 3% to hit the day’s low at Rs 527.35 on BSE. 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.
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Taking stock of the development, brokerage firm Nirmal Bang noted that the fact the Numaligarh refinery is carved out would weigh on the valuation. “Our replacement cost based value of Rs 583 for BPCL includes Rs 62 per share or 10.6 per cent. Our Base case PE (price to earning) based target price of Rs 512 includes a similar value for NRL. The stake sale, excluding NRL, will only impact government receipts,” Nirmal Bang said in a morning note to its clients.
The government has given its approval 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.