BPCL rose on Wednesday on the back of reports that the Centre is in the process of appointing a global advisor for divestment of its equity stake in the state-run oil refiner.
By 14:20 IST, the Bharat Petroleum Corporation scrip jumped by 3.17% to Rs 216.40 on the BSE. A relatively higher volume of over 2.83 lakh shares was recorded on the counter. In 10 sessions between 28 February and 17 March 2003, the scrip had shed 8.24% to Rs 209.75 from Rs 228.60.
Today's recovery on the BPCL counter was due to buying support from operators and institutions following reports that the Centre has invited Expressions of Interest from merchant bankers in order to select a global advisor to the divestment process of BPCL.
This is the first step in the divestment of the Centre's 35.2% stake in the public sector oil refiner. Earlier, the Centre had privatised 13 state-run firms between April and December 2002. It had hoped to collect Rs 12,000 crore (Rs 120 billion) in FY 2002-03 but has managed only Rs 3,122 crore (Rs 31.22 billion) so far. Meanwhile for FY 2003-04, the Centre hopes to garner Rs 13,200 crore (Rs 132 billion) from divestment.
According to recent reports, the Centre plans to offload 25% of its equity in BPCL to US investors and 10% to the domestic public. The Centre had earlier decided to offload 15% each in the domestic and overseas markets. Another 5% will be offered to employees of BPCL at one-third the market price. After the two-pronged offerings, the Centre's holding in BPCL is expected to fall to 26% from the current 66.20%.
Recently, BPCL announced that it would be investing Rs 7,500 crore (Rs 75 billion) in the next five years for floating joint ventures, modernisation, restructuring and brand building. The company plans to open 600 to 700 retail outlets by next year.
Currently, BPCL has about 4,500 retail outlets and a 20% share in the petroleum products market. As per recent reports, BPCL plans to double its refining capacity to 2,40,000 bpd from the current 1,30,000 bpd by October 2004, and modify its refineries so that it can process different grades of oil.
For the third quarter ended 31 December 2002, BPCL recorded a net profit of Rs 233 crore (Rs 2.33 billion), up by 224% over the Rs 71.90 crore it registered in the corresponding period of the previous year. Net sales increased by 29% to Rs 12,645.2 crore (Rs 126.45 billion) from Rs 9,801.1 crore (Rs 98.01 billion) in DQ 2001.
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