BPCL shares touch 52-week low as disinvestment plan hits hurdle with only one bidder left in fray; stock corrects 26% in one year

BPCL Privatisation: Shares of Bharat Petroleum Corporation Limited (BPCL) slipped around 2 per cent to hit a new 52-week low after the government decided to withdraw stake sale plan temporarily. The government move comes after two bidders of BPCL privatisation backed out, halting the Bharat Petroleum Corporation Limited disinvestment plans, and leaving behind just one bidder.  

Meanwhile, shares of BPCL dropped nearly two per cent to Rs 324 per share on the BSE. Shares of public oil marketing company traded on 52-week high value of Rs 503 apiece on the BSE on September 14, last year. BPCL shares have tanked nearly 26% in the last one year as on May 19.  

Earlier, sources familiar with the matter told Zee Business that the divestment plan of state-run refiner was put on hold as the government has received only one bid.  

The government had planned to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Ltd (BPCL) and invited Expression of Interest from bidders in March 2020. At least three bids came in by November 2020 but only one remains now after the others withdrew from the race. 

The government will bring a fresh plan after completing its ongoing plans related to Bina Petrochemicals and green energy initiatives, the sources revealed. Once the ongoing plans are completed, the valuation of the company would increase and then the government would bring a new divestment plan with higher value. 

Considering the geopolitical situation and energy transition, the government may offer a 26 per cent stake along with management control, another source said. 

This will limit the amount of money a bidder has to put upfront to buy the company. 

At the current trading price of BPCL on the stock market, the government's 53 per cent stake is worth over Rs 38,000 crore. On top of this, the bidder would have had to shell out another Rs 18,700 crore towards an open offer to minority shareholders. 

If the government were to sell a 26 per cent stake, the financial outgo of the bidder would total no more than Rs 37,000 crore. 

The government has not made any formal statement on withdrawing the stake sale of BPCL.