Bharat Petroleum Corporation Ltd to sell stake for Rs 9,876 crore

NEW DELHI: The 'Bharat Petroleum Corporation Ltd' (BPCL) on Monday said that it will exit Numaligarh Refinery in Assam. The privatisation-bound BPCL added that it will sell its entire stake to a consortium of Oil India Ltd and Engineers India Ltd for Rs 9,876 crore.

With this sale of the Numaligarh Refinery Ltd, the way has been cleared for privatisation of India's second-largest fuel retailer.

In keeping with the Assam Peace Accord, the government had decided to keep Numaligarh Refinery Ltd (NRL) in the public sector. As part of this, BPCL was to sell its entire 61.65 per cent stake to the State-owned firms.

A consortium of Oil India Ltd, Engineers India Ltd, and the Government of Assam expressed interest in buying the stake and the BPCL board on Monday approved the sale.

"The board of directors of BPCL at the meeting held on March 1, 2021, has approved the proposal for sale of entire equity shares of 445.35 crore held by BPCL in NRL to a consortium of OIL and EIL and to Government of Assam," said the firm in a filing to the stock exchanges. The Total consideration would be Rs 9,875.96 crore.

The consortium of OIL and Engineers India Ltd is likely to acquire 49 per cent while the remaining 13.65 per cent will be sold to the Government of Assam.

The NRL operates a 3 million tonnes per annum oil refinery in Assam. The OIL currently holds 26 per cent equity in NRL while the Government of Assam has around 12.35 per cent.

Post-NRL sale, the BPCL would be left with three refineries at Mumbai, Kochi (Kerala) and Bina (Madhya Pradesh). The government is selling its entire 52.98 per cent stake in BPCL in the nation's biggest privatisation till date.

The Vedanta Group and private equity firms — Apollo Global and I Squared Capital's Indian unit Think Gas — have put in an expression of interest for buying the government's stake.

The sale of NRL is the first step towards the disinvestment of BPCL. The government has already indicated that it expects to complete BPCL privatisation by the first half of the fiscal beginning April (2021-22). The sale is key to achieving the Rs 1.75 lakh crore disinvestment target set for 2021-22.

The BPCL will give the buyer ownership of around 15.33 per cent of India's oil refining capacity and 22 per cent of the fuel marketing share.

The NRL is looking to expand its refining capacity from 3 million tonnes per annum to 9 million tonnes a year at an investment of Rs 22,594 crore. The project is expected to be completed by 2024.

The expansion also involves setting up of crude oil pipeline from Paradip in Odisha to Numaligarh and a product pipeline from Numaligarh to Siliguri in West Bengal. (Agencies)

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