HPCL found itself in the thick of the action in early trades on Monday on reports that the government has invited initial bids for divesting its stake in the company.
By 9:56 IST (barely as trading commenced), the scrip of the state-run oil refiner and retailer had risen 2.49% to Rs 306.15. It registered volumes of 18,216 shares on BSE by then.
The government reportedly will invite initial bids for 34% stake in the state-run oil refiner today (10 February 2003).
The invitation of expressions of interest will precede the presentation by merchant bankers, aspiring to be appointed as HPCL advisors, scheduled to commence on 17 February 2003. The move is likely to put the privatisation of HPCL on the fast track. SBI Caps, ICICI Bank, J M Morgan and Merrill Lynch are among those believed to have submitted bids to become advisors for divestment in HPCL.
Last week, the disinvestment ministry said it planned to wrap up the company's privatisation by June 2003.
A smooth divestment process will enhance the stock's valuation as there is talk in the market that the reserve price for HPCL is likely to be Rs 600-700 per share. However, apprehension also runs high over the fact that workers of state-run petroleum companies are threatening a nationwide strike to block the sale of HPCL and peer BPCL.
In January 2003, the government had given the green signal for divestment in HPCL (as well as the modus operandi for divestment). According to the Centre, 34.01% of HPCL's equity (government-held) would be sold to a strategic partner and 5% to the company's employees. The government will retain 12%. Currently, the government holding in HPCL is 51.01%.
On 30 January 2003, HPCL unveiled impressive third quarter ended 31 December 2002 results - a gigantic 444% rise in net profit to Rs 330.62 crore (Rs 3.3 billion) compared to Rs 60.81 crore in the corresponding period of the previous year. Net sales jumped 28% to Rs 14,210.23 crore (Rs 142.1 billion) from Rs 11,1156.38 crore (Rs 1111.56 billion) in DQ 2001.
HPCL's board of directors have recommended an interim dividend of 20% (ie Rs 2 per share) for the financial year 2002-03.
The company has attributed its solid performance to buoyant international prices coupled with improved refining and marketing margins.
Growth was recorded in sales of almost all categories of produicts - LPG (9.5%), MS (8.9%), HSD retail (2.3%), AFT (6.2%), FO (6.1%), bitumen (24.4%), lubricants (27.6%), naphtha (4.5%) and LSHS (4.1%). Only kerosene (SKO) (4.3%) moved negatively.
HPCL has about 4,600 retail outlets and a 20% market share in retailing petroleum products.
BSE Code: 500104