Privatisation of BPCL priced between $6.9 bn and $10.3 bn
OIL & GAS

Privatisation of BPCL priced between $6.9 bn and $10.3 bn

The acquisition cost for Bharat Petroleum Corporation Ltd (BPCL) as part of the privatisation process is being estimated between $6.9 billion and $10.3 billion, according to Switzerland-based investment bank and financial services firm Credit Suisse.

Credit Suisse informed the media that the reserve price is expected to be approximately Rs 500 per share, and post dividend (Rs 50-60 per share), the government's stake is worth $6.9 billion. Post the open offer, the maximum outflow would be $10.3 billion, the global wealth manager added.

It has also been noted that the buyer can halve the capital expenditure (capex) at BPCL and sell non-core assets to the tune of $4 billion. Among the bidders, Apollo Global has done a deal of this size, while Vedanta has partnered with Centricus.

The firm said that steady-state earnings before depreciation, interest, taxes and amortisation (EBITDA) for BPCL could be $2 billion to $2.5 billion. The higher end of range is possible when the potential acquirer is able to reduce refining costs, increase the productivity of marketing outlets, and increase non-fuel revenues.

The macro is also improving for the refining sector, with inventories now down for both diesel and gasoline, and the cracks have started improving.

The investment banking company said that there is ample scope to boost steady-state EBITDA by $450 million. According to Credit Suisse, refining cost reduction can boost EBITDA by $150 million, higher non-fuel EBITDA at marketing outlets can add $100 million, and higher footfalls can add $200 million.

BPCL kicked off with project Nishchay in the financial year 2016 to promote non-fuel revenues, but it gave up on most of the initiatives in two to three years. Even the current app SmartDrive for customers does not have real-time data at the outlets, and hence the active users are limited.

Image Source


Also read: BPCL disinvestment may see PSU participation

Also read: BPCL divestment bidding to become competitive

Also read: BPCL privatisation gets three bids

The acquisition cost for Bharat Petroleum Corporation Ltd (BPCL) as part of the privatisation process is being estimated between $6.9 billion and $10.3 billion, according to Switzerland-based investment bank and financial services firm Credit Suisse. Credit Suisse informed the media that the reserve price is expected to be approximately Rs 500 per share, and post dividend (Rs 50-60 per share), the government's stake is worth $6.9 billion. Post the open offer, the maximum outflow would be $10.3 billion, the global wealth manager added. It has also been noted that the buyer can halve the capital expenditure (capex) at BPCL and sell non-core assets to the tune of $4 billion. Among the bidders, Apollo Global has done a deal of this size, while Vedanta has partnered with Centricus. The firm said that steady-state earnings before depreciation, interest, taxes and amortisation (EBITDA) for BPCL could be $2 billion to $2.5 billion. The higher end of range is possible when the potential acquirer is able to reduce refining costs, increase the productivity of marketing outlets, and increase non-fuel revenues. The macro is also improving for the refining sector, with inventories now down for both diesel and gasoline, and the cracks have started improving. The investment banking company said that there is ample scope to boost steady-state EBITDA by $450 million. According to Credit Suisse, refining cost reduction can boost EBITDA by $150 million, higher non-fuel EBITDA at marketing outlets can add $100 million, and higher footfalls can add $200 million. BPCL kicked off with project Nishchay in the financial year 2016 to promote non-fuel revenues, but it gave up on most of the initiatives in two to three years. Even the current app SmartDrive for customers does not have real-time data at the outlets, and hence the active users are limited. Image Source Also read: BPCL disinvestment may see PSU participation Also read: BPCL divestment bidding to become competitive Also read: BPCL privatisation gets three bids

Next Story
Real Estate

Bennet & Bernard Unveil Dutch-Inspired ‘Casa El Toledo’ in Goa

Bennet & Bernard Group, Goa’s leading luxury real estate developer, has launched its newest project, Casa El Toledo, in Assagao. The enclave features 18 ultra-luxury 4 BHK Dutch-style villas blending European charm with tropical elegance. Each villa includes a private pool, double-height ceilings, open courtyards, alfresco dining areas, and English-inspired landscaping. The interiors are curated by noted Dutch designer Kelly Marie.   Reflecting the grandeur of the Dutch Golden Age, Casa El Toledo harmonises heritage aesthetics with modern sensibilities. Expansive interiors flow..

Next Story
Equipment

Godrej Delivers Heaviest Ecolaire Surface Condenser to US Project

Godrej Enterprises Group’s Process Equipment business has manufactured and delivered its heaviest Ecolaire® Surface Condenser to date, weighing nearly 450 metric tonnes, for a power-generation project in the United States. The project, powered by natural gas and partly designed for hydrogen compatibility, marks another step in advancing clean energy systems. Produced at the company’s GreenCo-certified Dahej facility in Gujarat, the equipment demonstrates India’s growing engineering capabilities and reinforces Godrej’s ‘Make in India for the World’ vision.  Hussain S..

Next Story
Infrastructure Energy

India, Brazil Discuss Energy Ties And Oil Investments

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri held discussions with Celso Luis Nunes Amorim, Special Advisor to the President of Brazil, and senior Brazilian officials to strengthen bilateral cooperation in the oil, gas, and energy transition sectors. The talks took place during a dinner hosted by Kenneth H da Nobrega, Ambassador of Brazil to India, at his residence in New Delhi.Mr Puri said the meeting focused on Indian investments in Brazil’s oil and gas sector, as well as expanding collaboration in energy transition and biofuels. “The enriching conversation revolved ar..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?