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Govt to shed 23% in HPCL, 37% in BPCL

Gaurav Raghuvanshi in New Delhi

The divestment ministry has suggested offloading a 23 per cent government equity in Hindustan Petroleum Corporation Ltd to a strategic partner while divesting 37 per cent in Bharat Petroleum Corporation Ltd in the market.

According to the Cabinet note circulated among ministries ahead of the crucial meeting of the Cabinet Committee on Divestment, the government will retain 26 per cent equities in both the petroleum marketing companies after divestment. At present, the government holds a 51 per cent stake in HPCL and a 66 per cent stake in BPCL.

In the case of BPCL, the modalities regarding the timing and quantum of the equity to be offloaded in the domestic and international markets would be decided by the CCD, a senior government official told Business Standard.

The government is likely to offer a 25 per cent equity in BPCL through an initial public offer in the domestic markets, the balance being in the form of ADRs and GDRs.

In addition, about 2 per cent equity in HPCL and 3 per cent in BPCL will be offered to the employees, according to the divestment ministry proposal.

As regards the date of the CCD meeting, Divestment Minister Arun Shourie said on Tuesday that the Prime Minister's Office was yet to decide.

Meanwhile, the government is awaiting the Attorney General's response to the legal aspects of divestment in companies acquired through Acts of Parliament.

The divestment ministry had sought the Attorney General's response following the Opposition's contention that the government could not sell HPCL and BPCL because the two companies had been acquired by the government through Acts of Parliament.

The CCD meeting will deliberate on the eligibility criteria for suitors for HPCL and will take a decision on the request from Oil and Natural Gas Corporation and fertiliser cooperatives Iffco-Kribhco to be allowed to bid for the downstream major that has a 20 per cent market share in the country.

The CCD meeting on September 7 decided that all public sector companies and multi-state cooperatives were to be barred from the divestment.

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