Cabinet approves stake sale in BPCL, four other PSUs

Cabinet approves stake sale in BPCL, four other PSUs

Union Finance Minister Nirmala Sitharaman addresses the media after a Cabinet meeting in New Delhi on Wednesday. PTI

The Union Cabinet on Wednesday approved the sale of the government’s stake in five blue-chip public sector companies, including Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation of India (SCI) and Container Corporation of India along with its management control to strategic buyers.

The move comes in the wake of a tardy sale of PSUs so far this year, which has fetched the exchequer only a little above Rs 17,000 crore as against the asset sale target of Rs 1.05 lakh crore in 2019-20.

The government will sell 53.29% of its stake in BPCL. However, the Numaligarh Refinery in Assam in which BPCL, Indian Oil and Assam government have their shares, will not be divested.

“Numaligarh would be carved out of BPCL before divestment,” Finance Minister Nirmala Sitharaman said. BPCL has 61% stake in Numaligarh refinery.

This is the first strategic sale of a public sector oil company by the government. A strategic sale is one in which the controlling stake is sold to a private buyer.

While the government will sell its entire 63.75% share in SCI, it will divest 30.8% in Concor to strategic buyers along with the management control.

Besides, the government will sell its stake in THDC India and North Eastern Electric Power Corporation Ltd (NEEPCO) to state-owned NTPC Ltd.

The Cabinet also approved cutting government’s stake in select public sector undertakings to below 51% while retaining the management control.

The decision to carve the Numaligarh refinery out of BPCL was taken after protests staged by lawmakers from Assam inside parliament.

On Wednesday, BPCL shares hit a new high of Rs 548, up 6%, while SCI was up 11% after the news of the government’s plan of strategic disinvestment broke in the day.