Shares of Bharat Petroleum Corporation Limited (BPCL) dipped 6 per cent to Rs 370.50 on the BSE in Monday’s intra-day trade on reports that the government may revisit the company’s privatization plan, including revision of the terms of sale. The transition towards green and renewable fuel has made privatization difficult in existing terms, a PTI report said quoting government officials.
The government, which currently holds 52.98 per cent stake in the oil marketing company, is planning to sell its entire stake for which three expressions of interest (EoIs), including one from billionaire Anil Agarwal-led Vedanta Group, have been received.
The government was to seek financial bids once bidders completed due diligence and the terms and conditions of the share purchase agreement were finalized, PTI reported. CLICK HERE FOR FULL REPORT
That said, in an interview with MoneycontrolAnil Agarwal, chairman of Vedanta Resources said that the government has decided not to go ahead with the privatization plan of state-run BPCL and has told its suitors that it will revise the plan and come to market.
Meanwhile, in the past one month, the stock of BPCL has outperformed the market by gaining 3 per cent, as compared to 1 per cent decline in the S&P BSE Sensex. However, over the past six months, it has slipped 14 per cent, as against 7 per cent fall recorded by the benchmark index.
Analysts at HDFC Securities have a ‘BUY’ rating on BPCL, with a target price of Rs 420, given that it has corrected around 30 per cent from its peak over the last six months, owing to pressure on auto-fuel marketing margins and an increase in LPG under-recoveries.
“We believe the recent correction is overdone, and see limited downside from current levels, led by improvements in refining margins, resumption of daily auto-fuel price changes, and a gradual reduction in LPG under-recoveries,” the brokerage firm had said in a March 21, 2022 report.