Fitch Ratings on Monday said uncertainty over the bidder consortiums and process complexity, including valuation, may lead to potential delays in privatisation of India’s second-largest fuel retailer, Bharat Petroleum Corporation Ltd (BPCL).
Fate of GATE 2022 Exam Soon to be disclosed by Director, IIT Kharagpur
Affirming BPCL’s rating at ‘BBB-‘ with a negative outlook, Fitch said it continues to treat the potential divestment of the company by the Indian government as an event risk. Fitch expected BPCL’s marketing sales to improve to 43 million tonnes (MT) in FY22 from 41 MT in FY21, still 6 per cent below the FY20 level.
“This reflects the impact on India’s petroleum product demand from the pandemic’s second wave in 1QFY22 and the risks of further waves. Source: Business Standard.
After BPCL, CONCOR, SCI and Air India, the government has given an “in-principle” approval for the privatization of 24 PSUs, said Anurag Singh Thakur
After BPCL (Bharat Petroleum Corporation Ltd), CONCOR (Container Corporation of India), SCI (Shipping Corporation of India) and Air India, the government has given “in-principle” approval for the privatisation of 24 PSUs, including subsidiaries, units, and joint ventures. In line with its policy thrust, the government will be looking to offload majority stakes in PSUs and transfer the management control to a strategic player, Minister of State for Finance Anurag Singh Thakur said in a written response in the Lok Sabha on Monday. The decision comes in the backdrop of the government releasing PIMs (Preliminary Information Memorandum) for the privatisation of Air India and BPCL.
The criteria for privatisation of PSUs: Thakur said that the government follows a policy of strategic disinvestment of CPSEs, which are not in “priority sectors.” “For this purpose, NITI Aayog has been mandated to identify such CPSEs based on the criteria of (i) National Security; (ii) Sovereign function at arm’s length, and (iii) Market Imperfections and Public Purpose,” Thakur said. The government had stated that the profitability of a company, or the lack of it, is not a criterion for disinvestment.
Strategic disinvestment or privatisation of PSUs is being guided by the basic economic principle that the government should discontinue in sectors, where competitive markets have come of age and economic potential of such entities may be better discovered in the hands of strategic investor due to various factors such as infusion of capital, technological up-gradation and efficient management practices; and would thus add to the GDP of the country, said the minister.
The backdrop: The news comes as the government races against time to meet its disinvestment target of Rs 65,000 crore before March-end. For financial year 2019-20, the government has set for itself a disinvestment target of Rs 2.1 lakh crore. Three big disinvestments that the Centre will be relying on to raise funds in the next fiscal year are: LIC IPO, Air India and BPCL. Source: psuwatch