Castrol India shares rise 9% as BP to sell majority stake to Stonepeak

Shares of Castrol India witnessed a significant surge of 9% after BP Plc reached an agreement to sell its 65% stake in parent company Castrol to Stonepeak, valuing the business at an enterprise value of $10.1 billion.

BP will generate approximately $6 billion in net proceeds from the deal, which includes accelerated dividend payments. The proceeds are earmarked to reduce BP's net debt, which stood at $26.1 billion at the end of Q3 2025, towards its target range of $14–18 billion by the end of 2027. BP emphasised that the deal "strengthens its balance sheet, simplifies its portfolio, and supports its strategy to focus on downstream operations."

Castrol India stock rose 8.92% to Rs 202.50 in afternoon trade. Market cap of the firm stood at Rs 18,936 crore. The company's ownership landscape includes LIC with a 10% stake, the Government of Singapore at 1.33%, and a robust base of over 5 lakh small retail shareholders controlling 16.6% of Castrol India.

The current transaction, expected to conclude by the end of 2026 pending regulatory approvals, will result in a new joint venture with 65% ownership by Stonepeak and 35% by BP. After a two-year lock-up period, BP will have an option to sell its remaining stake.

The deal also covers minority interests in Castrol's operations in India (49% interest), Vietnam, Saudi Arabia, Thailand, and other regions. BP's interim CEO Carol Howle described the development as a "very good outcome for all stakeholders". Howle added, "The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan. And we are doing so with increasing intensity - with a continued focus on growing cash flow and returns, and delivering value for our shareholders."

The transaction follows a strategic review of Castrol and is based on an EV/LTM EBITDA multiple of approximately 8.6x. The move by BP is in line with its renewed focus on downstream operations, as reflected in its statement that the deal 'strengthens its balance sheet, simplifies its portfolio, and supports its strategy to focus on downstream operations.'