The government on Thursday permitted 100 per cent foreign investment under the automatic route in oil and gas PSUs that have received in-principle approval for strategic disinvestment. This would lead the way for the privatisation of the country’s biggest oil refiner Bharat Petroleum Corp Ltd (BPCL), where the government is selling its entire 52.98 per cent stake.
The Department for Promotion of Industry and Internal Trade (DPIIT) said in a press note that a new clause has been added to the FDI policy for the sector. "Foreign investment up to 100 per cent under the automatic route is allowed in case an 'in-principle' approval for strategic disinvestment of a PSU has been granted by the government," it said.
The decision was taken regarding this last week by the Union Cabinet.
This move comes as two out of the three companies to put in an initial expression of interest (EoI) to buy out the government’s stake are foreign entities.
While the government has opened up the sector for full FDI, it is currently selling its stake only in BPCL. Indian Oil Corporation (IOC) is still under the government’s direct control.
The firm acquiring the government's 52.98 per cent stake in BPCL will also have to make an open offer to buy an additional 26 per cent stake from other stakeholders at the same price, as per the takeover rules.
Mining-to-oil conglomerate Vedanta and US-based private equity firms Apollo Global and I Squared Capital's arm Think Gas are in the race to buy the government's stake in BPCL.
(With PTI inputs)
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today