BPCL privatisation: Government considering tweak in FDI policy, check details

The government is considering a tweak in the current Foreign Direct Investment (FDI) policy to allow overseas investors to pick up majority stake in the India's second biggest oil refiner Bharat Petroleum Corp Ltd (BPCL), according to a PTI report.

The government is selling its entire 52.98 percent stake in BPCL. Vedanta, mining-to-oil conglomerate has put in an expression of interest (EoI) for buying the government's 52.98 percent stake in the company. The other two bidders are said to be global funds, one of them being Apollo Global Management, as per a report by PTI.

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The proposal is under discussion between the departments of disinvestment (DIPAM), industry (DPIIT) and economic affairs (DEA).

At present, only 49 percent FDI is permitted through automatic route in petroleum refining by the public sector undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. With this provision, a foreign player would not be able to buy more than 49 percent stake in BPCL.

According to sources, quoted by PTI, DIPAM has suggested to amend the existing FDI policy to allow 100 percent foreign direct investment in a central public sector enterprise (CPSE) in the petroleum and natural gas sector.

On the other hand, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed for a separate provision for this specific situation.