HPCL was sought after in early trades on Wednesday as media reports suggested that the company's divestment is likely to be wrapped up by June 2003.
By 10:25 IST, the scrip of the oil refining and marketing PSU edged up 1.56% to Rs 306.80. Over 386,000 HPCL shares were recorded as volumes on BSE by then. With today's gain, HPCL has risen 6.4% in four sessions from its close of Rs 288.25 on 30 January 2003.
HPCL has become the scene of the action of late as divestment euphoria resurfaces on the counter. Today, reports that the divestment ministry plans to wrap up the company's privatisation by June 2003 has formed the backbone of the spurt. The government is now expected to invite preliminary bids for a 34% stake in the company by 10 February 2003.
There is market buzz that the reserve price for HPCL is likely to be Rs 500-600 per share. This price will be well-received in the market and should give the stock a big boost .
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 BPCL.
Earlier, the government had given a 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%.
Meanwhile, interest in the scrip has also been generated by the impressive results registered by the company. On 30 January 2003, HPCL unveiled its 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.
Both net profit as well as net sales beat estimates of a capitalmarket.com poll of three oil analysts - a net profit of Rs 145 to Rs 158.6 crore (Rs 1.45 to Rs 1.58 billion) on net sales of Rs 12,155-12,550 crore (Rs 121.55-125.5 billion).
HPCL's board of directors has also recommended an interim dividend of 20% (ie Rs 2 per share) for the financial year 2002-03. The company attributed the solid performance to buoyant international prices coupled with improved refining and marketing margins.
Growth was recorded in sales of almost all categories of products - 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
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