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
Building Material

Icra Sees 80–85 MT Cement Capacity Boost in Two Years

India’s cement industry is poised for its biggest expansion in years, with new capacity of 80–85 million metric tonnes (MT) scheduled over the next two financial years, a report by Icra shows. Production is forecast to reach 480–485 MT in FY2026—an increase of 6–7 per cent year on year—after climbing 6.3 per cent to 453 MT in FY2025, thanks to solid demand from housing and government led infrastructure projects.Icra expects 40–42 MT of fresh capacity to come on line in FY2026, up from 31 MT in FY2025. The eastern region will lead the way, adding about 14–1..

Next Story
Building Material

UltraTech Adds 1.8 Million Tonne Mill at Maihar Plant

UltraTech Cement Ltd, India’s largest cement maker, has commissioned its second cement grinding mill at the Maihar complex in Madhya Pradesh, adding 1.8 million tonnes per annum to production. The company said the start up aligns with its continuing expansion programme announced earlier this year.The first Maihar mill came on stream in March 2025. With the new line, UltraTech’s domestic grey cement capacity rises to 186.86 million tonnes per annum (mtpa); including overseas operations, total capacity reaches 192.26 mtpa.Financially, UltraTech recorded EBITDA of about Rs 46.18..

Next Story
Infrastructure Urban

CONCOR Launches Special Containers for Bulk Cement

Container Corporation of India Ltd (CONCOR) has introduced specialised tank containers for transporting bulk cement in loose form, marking a transformative step in Indian cement logistics. This is the first time such containers are being used in the country for cement movement.The initial shipment using these containers has successfully commenced from My Home Cement Siding (MMHM) at Mellacheruvu, Andhra Pradesh, to CONCOR’s Inland Container Depot (ICD) in Whitefield, Bangalore. This development underscores CONCOR’s continued focus on providing innovative and sustainable logistics solutions..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?