Air India, BPCL disinvestment to be completed by July-August

The government is likely to ask bidders for government's stake sale in national carrier Air India and Bharat Petroleum Corporation Ltd (BPCL) to submit their financial bids in next two months as it intends to complete the divestment latest by July-August.

The COVID-19 pandemic had hit government's plans to divest its stake in BPCL and Air India in financial year 2020-21. In the revised Budget estimates, the Finance Ministry reduced its divestment target for FY21 to Rs 32,000 crore from Rs 2.1 lakh crore earlier.

While the Department of Investment and Public Asset Management (DIPAM) targets to complete the stake sale by June, the government may have to relax the time period for bidders to complete due diligence.

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"COVID-19 has affected travel, especially from overseas. Some bidders may need to bring in experts from overseas for valuation of the assets and/or physical verification of plants and equipment to assess their real worth," the Financial Express quoted an official as saying.

The government had received three preliminary bids, including one from Vedanta, for selling its stake in BPCL, while the Tata Group is among those who have submitted Expression of Interest for Air India.

The government targets to get Rs 1.75 lakh crore from disinvestment in 2021-22. In her Budget speech, Finance Minister Nirmala Sitharaman had said that strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Limited, among others, would be completed in 2021-22.

She also proposed privatisation of two public sector banks, other than IDBI Bank, and one general insurance company in FY22. Besides, the government will also come out with IPO of Life Insurance Corporation of India in the fiscal year.

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