Union Cabinet relaxes foreign investment norms to help sell BPCL: Report
The Union Cabinet on Thursday approved a plan to allow 100% foreign direct investment in state-owned oil companies, announcing a strategic stake sale, a move to help privatize Bharat Petroleum Corp. Sources said, Reuters Reported.
One of the sources said, “Foreign investment up to 100% under the automatic route is allowed in cases where the government has undertaken strategic disinvestment of a PSU (Public Sector Undertaking) engaged in petroleum and natural gas sector. In-principle approved.”
India so far allows 49% FDI in government oil and gas companies. The government is looking to sell around 53% stake in India’s second largest state-run refiner BPCL in this financial year ending March 2022, as part of a plan to raise Rs 1.75 trillion from stake in companies.
According to people familiar with the matter, discussions with investors over a stake sale of Bharat Petroleum Corp, which could fetch the government around $7 billion, have not progressed much recently, bloomberg reported earlier this week. The settlement could only happen early next year instead of 2021, one of the people said, adding that the matter is private as the matter is not identified.
Bloomberg News reported in May that India has already given bidders access to the refiner’s financial data in April and some have held meetings with BPCL management. The government’s 53 per cent stake in the refiner, based on Monday’s closing price, is valued at around Rs 52,000 crore. Shares of BPCL have gained about 19 per cent so far this year.
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