ABSTRACT
The oil sector has been considered a strategic sector and privatising a profitable CPSE having a ranking in global Fortune 500 companies was a big decision taken by the federal government in November 2019. The government invited bids for the sale of its entire 52.98% stake in BPCL in March 2020.The last date to submit EOI had to be extended multiple times and finally it closed on 16 November 2020. Ahead of privatisation, BPCL decided to offer Voluntary Retirement and around 1,500 employees took it. Also, the FDI limit was increased from 49% to 100% in July 2021. It is reported that besides Vedanta, who has put in an Expression of Interest, the other two are US-based private equity firms Apollo Global and I Squared Capital’s arm Think Gas. The government’s 53% stake in BPCL was valued at about ₹50,900 crore ($6.9 billion) based on 7 May 2021 closing price. The question to consider is whether privatising BPCL to capture future earnings in one lump sum vis-à-vis steady future dividend income is prudent.
