Pandemic slows BPCL disinvestment process, LIC IPO: Report
India’s plan to sell a majority stake in the country’s second-largest state refiner has slowed amid the coronavirus pandemic and other government initiatives such as an initial public offering of the country’s largest insurance company, according to people familiar with the matter.
Discussions with investors on a stake sale of Bharat Petroleum Corp, from which the government could get around $6.9 billion, have not progressed until recently, the people said. The settlement could only happen early next year instead of 2020, said one of the people, asking not to be identified as the matter is private.
Bloomberg News reported in May that India has already allowed bidders to access refiners’ financial data in April and some have held meetings with BPCL management. The government’s 53 per cent stake in the refiner is valued at around Rs 515 billion ($6.9 billion) as of Friday’s closing price.
People said that though discussions have slowed down, the disinvestment plan has not stopped formally and bidders are still working on possible bids. A representative of the finance ministry did not immediately respond to requests for comment, while a representative of BPCL declined to comment.
While the privatization of BPCL is part of the country’s efforts to raise capital to meet the fall in tax revenues as the pandemic hit the economy, the administration may have other priorities, including the Life Insurance Corporation of India IPO, which The nation’s largest ever.
The government last week asked banks to play a role in managing LIC’s share sale, saying its size could be “larger than any precedent” in Indian markets. The state-owned insurance company’s listing could take place by March 2022, Bloomberg News reported in June.
A second wave of coronavirus hit India in April, shutting down businesses and jobs with the ensuing lockdown, just as the economy began to recover from the early onset of the pandemic last year. The South Asian country recorded a total of 413,609 deaths, according to the latest data collected by Bloomberg News and Johns Hopkins University.