However, sliding crude oil prices may prove a dampener on the process

The government on Saturday invited bids for the sale of its entire 52.98% stake in country’s second biggest State-owned oil reﬁner Bharat Petroleum Corporation Limited (BPCL).

However, amid falling oil prices, analysts believe that the government will ﬁnd it diﬃcult to get a good valuation for the company.

“The government’s plan to sell its stake in BPCL could be delayed, as many global oil majors that have been looking at the company as an outlet to reﬁne their crude may revaluate their bids in a scenario of sinking oil prices,” said Fitch Ratings

Global oil majors, starting from world’s largest oil ﬁrm Saudi Aramco to U.S. major ExxonMobil, from Russia’s oil major Rosneft to Royal Dutch Shell, from Total of France to Abu Dhabi National Oil Company (ADNOC), are said to be interested in

buying out the government’s stake in BPCL. Expressions of interest for the strategic sale of BPCL have been invited by May 2, as per the bid document by the Department of Investment and Public Asset Management (DIPAM). “The Government of India is proposing strategic disinvestment of its entire shareholding in BPCL comprising 114.91 crore equity shares,

which constitute 52.98% of BPCL’s equity share capital, along with transfer of management control to a strategic buyer (except BPCL’s equity shareholding of 61.65%in Numaligarh Reﬁnery Limited),” said the bid document. “Saudi Aramco and Royal Dutch Shell will be the front runners for BPCL. Saudi Aramco believes that their oil will last for eternity and so they want to get long-term

crude supply contracts for Saudi oil. For Shell, tough environment norms in the West will be major factor to make reﬁneries investment in India,” a director of an oil marketing company (OMC) told The Hindu.

BPCL shares on the BSE closed down 3.74% to ₹402.85 on the BSE in a weak Mumbai market on Friday, valuing the company at ₹87,388.4 crore. The government has set $10 billion minimum net worth as one of the eligibility criteria in the expression of interest (EoI) for BPCL.

In case of a consortium of investors bidding for taking a stake in the oil reﬁner and marketer, the minimum net worth for each member has been set at $1 billion, according to the bid document. The government has explicitly excluded public sector units (PSUs), having 51% government ownership, from bidding for BPCL, a move that will make Indian Oil Corporation (IOCL) ineligible to bid for BPCL.