Bharat Petroleum Will Be Sold To Private Firms Before March; Air India’s New Owners To Be Revealed On Oct 15

During August 2021, the Secretary at the Department of Investment and Public Asset Management (DIPAM), Tuhin Kant Pandey said  that the government plans to complete privatization of Air India and BPCL this year.

According to the latest development, the government is working towards announcing a winning bid for Air India by October 15. 

Further, sources confirm that the financial bids for the airline are likely to be opened tomorrow on September 29.

Potential Bidder For Air India

It seems that “Tatas are being seen as the front runners for Air India divestment,”.

They were also the potential bidders when the government tried to sell a stake in Air India in 2001 and 2017.

It is noteworthy here that 85 percent of the bid price will be for Air India debt and the rest 15 percent will be in cash. 

So, the bidders will have the flexibility for all cash deals as well.

The deadline for submission of financial bids for Air India ended on September 15. 

Proceedings For BPCL Disinvestment

The Bharat Petroleum Corporation (BPCL) disinvestment is intended to be completed by March 2022 as mentioned by the company Chairman, Arun Kumar Singh.

Further, Singh said, “The government at many forums and instances has said that it intends to complete the transaction within this financial year, this means by March 2022. So as of now, the stated position is March,”.

Although, the Fitch Ratings suggests that there may be delays in BPCL’s privatisation. 

Saying  that “Bidders are conducting due diligence, but uncertainty over the bidder consortiums and process complexity, including valuation, may lead to potential delays,”.

So far, Vedanta, Apollo Global, and I Squared Capital had responded to the centre’s call for shedding its controlling stake in BPCL. 

The government has 52.98 percent stake in the public sector undertaking crude oil refineries.

To have that the prospective buyer may have to shell upwards of Rs 50,000 crores for the controlling stake at present valuation.

Singh said, “We wrote to SEBI seeking waiver for open offer, we are yet to hear from them. Based on response from Sebi, DIPAM, Ministry of Petroleum, and all government bodies will take a decision on what to do. It is a little early for a firm answer to the PLL and IGL issue. All these questions start from the open offer issue, and current regulations warrant an open offer should there be an acquisition of BPCL by anyone,”.