Govt Cancels India’s Biggest PSU Privatization: Bharat Petroleum Won’t Be Sold To Private Investors

The latest updates indicate that the government has called off the current expression of interest (EoI) process for BPCL’s privatization.

Why Would This Happen?

 This has happened as the majority of bidders have expressed their “inability to continue in the current process of disinvestment of BPCL”, as per a notification by the DIPAM. 

As we know that the center was planning to sell its entire 52.98% stake in Bharat Petroleum Corporation Ltd (BPCL) through the strategic disinvestment.

On success, it would have been the country’s biggest disinvestment ever.

Basically the multiple Covid-19 waves and geo-political conditions affected multiple industries globally, especially the oil and gas industry. 

Considering the conditions in the global energy market, the majority of QIPs have expressed their inability to continue in the current process of disinvestment of BPCL,” said the Department of Investment and Public Asset Management (DIPAM) in the notification released on Thursday.

Disinvestment Process Affected By Pandemic

Apart from this, DIPAM also said that immediately after the invitation for EoI, the EoI submission date had to be extended multiple times due to COVID-19 pandemic.

This was done to address the constraints faced by the potential bidders. 

Further added, “In response to the invitation, multiple EoIs were received from interested parties. Qualified interested parties (QIPs) had initiated due diligence on the company.”

DIPAM notified that the government has called off the current expression of interest (EoI) process for BPCL’s privatization, which was dubbed as India’s biggest ever, as the majority of bidders have expressed their “inability to continue in the current process of disinvestment of BPCL”. 

The notification said, “In view of this, based on decisions of the Alternative Mechanism (Empowered Group of Ministers), the Government of India has decided to call off the present EoI process for strategic disinvestment of BPCL and the EoIs received from QIPs shall stand canceled. Decision on the re-initiation of the strategic disinvestment process of BPCL will be taken in due course based on the review of the situation,”.

One of the officials said, “We need to go back to the drawing board on BPCL. There are issues in terms of consortium formation, geopolitical situation and energy transition aspects.”

Further adding that the transition towards green and renewable fuel has made privatization difficult in existing terms.

Earlier, the government  had invited expressions of interest from bidders in March 2020 from selling BPCL. 

During that time at least three bids had come in  By November 2020.