Following LIC, the government is considering selling a portion of Bharat Petroleum, according to a report

According to a Reuters report, the central government is considering selling up to a quarter of state-run refiner Bharat Petroleum Corporation Ltd (BPCL). This comes after the government sold nearly 22.13 crore shares in Life Insurance Corporation (LIC), or 3.5 percent of the company, in an initial public offering (IPO). The successful IPO netted the government Rs 20,557 crore.

After failing to attract suitors for its full 52.98 percent interest in BPCL, the government is considering accepting offers for a 20% to 25% part in the company instead of selling it entirely. According to the Reuters article, the concept was still in the early stages of negotiation.

BHARAT PETROLEUM

The government had hoped to collect $8-$10 billion by selling its entire interest in BPCL at first. After four years of planning, it requested proposals in 2020, aiming to attract significant businesses such as Russia's Rosneft.

However, Rosneft and Saudi Aramco did not bid since their investment plans were hampered by low oil prices and weak demand at the time.

THE NEXT YEAR

Even a partial sale of BPCL, according to government officials, is unlikely to be completed this fiscal year because the process would take more than a year. According to Reuters, contradictory rules on gasoline and diesel prices have hurt sales forecasts.

"There were numerous concerns, but the most recent was the government's failure to boost gasoline prices for four months between November and February," the person explained.

In February, five states, including the bellwether Uttar Pradesh, held elections, and pump prices did not begin to rise until March 22, when the BJP had won four of the five states.

WHO ARE THE PEOPLE IN THE FRAY?

Both officials stated the current debate began after all bidders withdrew from the competition last month. According to them, the final bidders were private equity firm Apollo Global Management and oil-to-metals conglomerate Vedanta Group.

The government's poor progress on privatisation ambitions is exemplified by the backtracking on BPCL's full stake sale.

PLANS FOR PRIVATISATION

Finance Minister Nirmala Sitharaman revealed plans to privatise some state-owned businesses in 2020, including banks, mining industries, and insurance companies.

However, little headway has been made, and both sources stated the government has put off selling any additional banks this fiscal year save IDBI Bank, which is majority held by LIC.

Due to the unstable market conditions, LIC lowered the size of its IPO to 3.5 percent from a previous decision of 5%. Even with its decreased size of approximately Rs 20,557 crore, the LIC IPO is the country's largest initial public offering.

However, the country's largest insurer had a lacklustre debut on stock exchanges on Tuesday, listing at a discount of more than 8%.

The revenues from the LIC offer account for nearly a third of the current fiscal's disinvestment objective of Rs 65,000 crore.

While it has already raised Rs 3,058 crore from a minority share sale in ONGC, the handover of Pawan Hans management control to M/s Star9 Mobility Pvt Ltd, a consortium of M/s Big Charter Private Limited, M/s Maharaja Aviation Private Limited, and M/s Almas Global Opportunity Fund SPC, is expected to be completed by June, according to PTI.

According to the PTI report, the government collected Rs 13,531 crore from CPSE disinvestment in the previous fiscal year, against a revised scaled-down target of Rs 78,000 crore.