The authorities on Thursday permitted 100 per cent overseas funding underneath the automated route in oil and gasoline PSUs which have acquired in-principle approval for strategic disinvestment. The transfer would facilitate privatisation of India’s second-biggest oil refiner Bharat Petroleum Corp Ltd (BPCL). The authorities is privatising BPCL and promoting its complete 52.98 per cent stake within the firm. According to a press notice of the Department for Promotion of Industry and Internal Trade (DPIIT), a brand new clause has been added to the FDI coverage for oil and pure gasoline sector.
“Foreign investment up to 100 per cent under the automatic route is allowed in case an ”in-principle” approval for strategic disinvestment of a PSU has been granted by the government,” it stated. The choice concerning this was taken by the Union Cabinet final week.
Two out of the three corporations which have put in an preliminary expression of curiosity (EoI) for purchasing out the federal government’s complete 52.98 per cent stake in BPCL are overseas entities. The FDI restrict in PSU-promoted oil refineries will proceed at 49 per cent — a restrict that was set in March 2008.
As of now, the federal government is promoting the stake in solely BPCL. Indian Oil Corporation (IOC), the nation’s largest, is the one different oil refining and advertising firm underneath direct authorities management. Hindustan Petroleum Corporation Ltd (HPCL) is now a subsidiary of state-owned Oil and Natural Gas Corporation (ONGC).
The authorities had in March 2008 raised the FDI restrict in oil refineries promoted by public sector corporations from 26 per cent to 49 per cent. The agency buying the federal government’s 52.98 per cent stake in BPCL may also must make an open provide to purchase a further 26 per cent stake from different stakeholders on the similar worth, as per the takeover guidelines.
Mining-to-oil conglomerate Vedanta and US-based non-public fairness corporations Apollo Global and I Squared Capital’s arm Think Gas are within the race to purchase the federal government’s stake in BPCL.