After failing to attract suitors for the entire firm, India is considering selling up to a quarter of state-owned refiner Bharat Petroleum Corporation Ltd, two officials said, as the government’s investment program is slower than expected.
Two government officials, speaking on condition of anonymity, told Reuters that New Delhi was considering inviting bids for a 20% -25% stake in BPCL, instead of selling its entire 52.98% holding directly.
Officials say discussions on the plan are at an early stage.
Initially, the government aimed to raise $ 8- $ 10 billion by selling its entire stake in BPCL. Planned four years ago, it invited bids in 2020, in the hope that big players like Russia’s Rosneft might be interested.
But Rosneft and Saudi Aramco did not bid, as low oil prices and weak demand at the time hampered their investment plans.
Government officials said that the sale of a part of BPCL is not likely to be completed this financial year as the process will take more than 12 months.
The inconsistent policy on petrol and diesel prices has hurt sales prospects, one of them said.
“There were many problems but recently petrol prices were not raised for four months between November and February due to government elections,” the official said.
Elections were held in five states, including Uttar Pradesh, in February, and pump prices began to rise only on March 22, when Prime Minister Narendra Modi’s Bharatiya Janata Party won four of the five states.
The current talks began last month after all bidders withdrew from the process, both officials said.
Private equity firm Apollo Global Management and oil-to-metal company Vedanta Group were the final bidders, they said.
The government, Vedanta and BPCL did not respond to emails for comment. Apollo Group declined to comment.
The delay in selling BPCL’s entire stake is a sign of slow progress in the government’s privatization plan.
In 2020, Finance Minister Nirmala Sitharaman announced plans to privatize most state-owned enterprises, including banks, mining companies and insurers.
But little progress has been made, with both officials saying the government has postponed plans to sell any bank other than IDBI Bank IDBI.NS this financial year, most of which is owned by Life Insurance Corporation of India LIFI.NS. LIC sank during its market launch on Tuesday after the government sold 3.5% of its shares.