Disinvestment: BPCL, Air India deals to conclude by July-August

On November 16, three bidders showed interest for BPCL buyout — Vedanta, Apollo Global Management and Think Gas.On November 16, three bidders confirmed curiosity for BPCL buyout — Vedanta, Apollo Global Management and Think Gas.

The shortlisted bidders for gasoline retailer-cum-refiner BPCL and nationwide service Air India (AI) are doubtless to be requested to submit their monetary bids in a few months, as the federal government intends to full the 2 transactions newest by July-August if not early, an official supply instructed FE.

Even although the division of funding and public asset administration (Dipam) had set a goal to full the transactions by June-end, the federal government might have to give shortlisted bidders somewhat bit of additional time if wanted to full their due diligence of the businesses and their belongings.

“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 official stated.

On November 16, three bidders confirmed curiosity for BPCL buyout — Vedanta, Apollo Global Management and Think Gas.

After failing to conclude a lot of the huge ticket deals together with BPCL sale in FY21 and pared the goal to simply Rs 32,000 crore from preliminary estimate of an formidable `2.1 lakh crore, the Centre is severe about attaining Rs 1.75-lakh-crore goal for FY22.

The worth of the Centre’s 53% stake in BPCL, which was down 35% to Rs 39,000 crore as on October 16, 2020, from Rs 60,000 crore in November 2019 (across the time the stake sale proposal was accredited by the Union Cabinet), has recovered to somewhat over Rs 50,000 crore as on Tuesday. However, the precise receipts will rely upon valuation and consideration of a premium.

BPCL operates 4 refineries in India, Mumbai Refinery (1955), Kochi Refinery (1966), BORL-Bina Refinery (2011) and Numaligarh Refinery (1999) with a mixed crude oil refining capability of 38.3 MMTPA (766 KBPD). BPCL’s stake in Numaligarh refinery can be bought to one other CPSE oil agency individually.

The officers are optimistic of the AI deal going via this time. The bids for AI are doubtless to be beneath Rs 20,000 crore. The Centre may get about Rs 3,000-crore money. With Covid-19 hitting the aviation sector laborious, Air India has estimated that its money losses would rise 80% on yr to Rs 6,000 crore in FY21. Air India CMD Rajiv Bansal had stated that the service’s losses might be round Rs 8,000 crore in FY21.

Besides BPCL and AI, strategic disinvestment pipeline for this fiscal consists of Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML and Pawan Hans – are all anticipated to be accomplished in FY22. Additionally, privatisation of two public sector banks and one common insurance coverage firm are to be taken up in FY22.

The IPO of LIC was the second largest element of the budgeted disinvestment goal for this fiscal. While the valuation of the insurer – which frequently performs White Knight to the federal government – can be recognized nearer to the itemizing, it’s believed to be price Rs 8-11.5 lakh crore, which means a ten% IPO may fetch the federal government Rs 80,000-110,000 crore.

The LIC IPO might hit market within the third or fourth quarter of this yr as preparation of embedded worth and restatement of accounts of LIC might to take about six months.

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