The privatisation of Bharat Petroleum Corporation Ltd (BPCL) is now likely to take place in the next fiscal as the sale process has not been completed within the decided timeline, say finance ministry sources.
"The process has been stalled due to various reasons. Many global energy majors are reconsidering their investments due to carbon and climate change issues," said a government source.
So far, Vedanta group, private equity firm Apollo Global and I Squared Capital's Think Gas arm had expressed interest in buying the government's 52.98 per cent stake. The government was hopeful of executing the BPCL sale by March this year.
The government wants a consortium with strong technical and financial muscle, given that it had expected $13 billion value for the exchequer and other shareholders. "We are hopeful that bidders will look at a consortium with global giants as financial partners in the upcoming days. The disinvestment process needs to be competitive," the source added.
The three suitors are talking to global energy giants and sovereign funds, but have not been able to firm up their bids as yet. A global push towards green energy is making it difficult to attract investments in fossil fuels. "Increasingly, it is going to be very difficult to attract good investors in the petroleum sector," according to sources.
BPCL's winning bidder will get access to a 25.77 per cent market share in India's fuel retailing segment, along with 15.3 per cent of India's refining capacity. BPCL operates four refineries in Mumbai, Kochi, Bina, and Numaligarh, with a combined capacity of 38.3 million tonnes per annum.
The Modi government may not be able to achieve its Rs 1.75 lakh crore disinvestment target for fiscal 2021-22. The target would have required BPCL to close by March, which seems unlikely now.
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