The government is contemplating to change its FDI policy regarding BPCL Disinvestment. Under this, the limit of FDI can be increased from 49 percent to 100 percent under the automatic route.
100% FDI can be allowed under the automatic route.
BPCL Disinvestment News: For the current financial year, the government has set a target of privatization and disinvestment at Rs 1.75 lakh crore. However, this process is getting delayed due to Corona. BPCL’s name tops the list of disinvestment this year. It is the second largest oil refinery company in the country, in which the government’s current stake is 52.98 percent and the government is going to sell its entire stake in it.
The government is moving forward on the policy of making the path easier for foreign investors so that there is no loss of investors in the privatization of Bharat Petroleum Corporation Limited. According to the latest information, the Ministry of Commerce and Industry has prepared a draft. Under this, 100% foreign investment is being considered through the automatic route. However, this approval will be only for those PSUs (Public Sector Undertakings) of the oil and gas sector, whose path for disinvestment and privatization is clear.
Considering increasing FDI up to 100%
According to sources, the commerce and industry ministry is considering adding a new clause in the FDI policy for the petroleum and natural gas sectors. Under this clause, if a decision is taken to privatize an oil and gas PSU, 100% FDI will be allowed under the automatic route.
Currently only 49 per cent FDI is allowed
In such a situation, if the government approves 100 percent FDI, then the commerce ministry will have to take the approval of the union cabinet on the proposal. Under the current rule, only 49 per cent FDI is allowed under the automatic route for petroleum refining and PSUs.
Vedanta has submitted EOI
Vedanta has submitted an Expression of Interest to buy BPCL. She wants to buy the entire stake of the government. Apart from this, two global funds have also shown interest in this. It has an Apollo Global Management.
Government will get about 53 thousand crore rupees
This week the share of BPCL has closed at Rs 472.35 level. The 52-week high is Rs 493.90 and the low is Rs 325. The market cap of the company this week is Rs 102464 crores. According to the current value, the government will get about 53 thousand crore rupees in return for 52.98 percent stake. Before privatization, mutual funds increased their stake in the company from 13.26 per cent to 16.38 per cent in the quarter. Number of mutual funds increased from 369 to 403. Apart from this, FIIs / FPIs have also increased their stake from 11.56 percent to 12.42 percent in this quarter.
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(with PTI input)
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