New Delhi: The Center has privatized state-run refiners BPCL On the backburner for now while reviewing the sales process of Shipping Corporation of India ,SCIOfficials said the move to proceed with the transaction would be initiated soon.
Though the privatization of BPCL was considered crucial to meet the Centre’s disinvestment target, the sale has faced several hurdles as Covid-19 proved to be a major hurdle in finalizing a deal.
The Center had started selling a bunch of companies in the new financial year and prominent ones on the list were BPCL, SCI, Concor and BEML. All these transactions are now facing delays and may hit the government’s plan to raise Rs 65,000 crore from stake sale in the current financial year. So far this year, it has raised Rs 3,026 crore.
With many countries transitioning to solar energy and other renewable energy, the appetite for BPCL is waning. Russia’s invasion of Ukraine also emerged as a major obstacle to moving forward with the sale, which was once considered the centerpiece of the government’s privatization campaign. Last year, some estimates revealed that the Center is eyeing Rs 70,000 crore to privatize BPCL. Anil AgarwalOf Vedanta and two foreign funds fit the state-owned company. The Center holds 52.98% stake in the oil refiner.
“The situation has changed. There is a move to solar and other clean energy. We have to take a decision, but at this point of time, there is no further momentum,” said an official privy to the development.
Sales of the Shipping Corporation of India (SCI) are also growing at a snail’s pace. The company had announced plans to liquidate its non-core assets. SCI wants to create a separate entity for its non-core assets in line with government policy. The demerger is yet to be approved and may further delay the transaction. The Center holds 63.74% stake in the company and the privatization of the firm has also faced several hurdles including the impact of the pandemic.
“We will soon review the process and look into all issues,” an official said. Globally, the shipping industry is under tremendous stress due to the war in Ukraine and the uncertainty in the global economy.
For now, the focus of DIPAM (Department of Investment and Public Asset Management) is now focused on listing the state-run insurance giant. LIC, Though the issue has been delayed due to war, the officials are hoping to ensure that the IPO gets released by the first week of May. Against the backdrop of the pandemic, the Center has reduced the valuation and stake.
Though the privatization of BPCL was considered crucial to meet the Centre’s disinvestment target, the sale has faced several hurdles as Covid-19 proved to be a major hurdle in finalizing a deal.
The Center had started selling a bunch of companies in the new financial year and prominent ones on the list were BPCL, SCI, Concor and BEML. All these transactions are now facing delays and may hit the government’s plan to raise Rs 65,000 crore from stake sale in the current financial year. So far this year, it has raised Rs 3,026 crore.
With many countries transitioning to solar energy and other renewable energy, the appetite for BPCL is waning. Russia’s invasion of Ukraine also emerged as a major obstacle to moving forward with the sale, which was once considered the centerpiece of the government’s privatization campaign. Last year, some estimates revealed that the Center is eyeing Rs 70,000 crore to privatize BPCL. Anil AgarwalOf Vedanta and two foreign funds fit the state-owned company. The Center holds 52.98% stake in the oil refiner.
“The situation has changed. There is a move to solar and other clean energy. We have to take a decision, but at this point of time, there is no further momentum,” said an official privy to the development.
Sales of the Shipping Corporation of India (SCI) are also growing at a snail’s pace. The company had announced plans to liquidate its non-core assets. SCI wants to create a separate entity for its non-core assets in line with government policy. The demerger is yet to be approved and may further delay the transaction. The Center holds 63.74% stake in the company and the privatization of the firm has also faced several hurdles including the impact of the pandemic.
“We will soon review the process and look into all issues,” an official said. Globally, the shipping industry is under tremendous stress due to the war in Ukraine and the uncertainty in the global economy.
For now, the focus of DIPAM (Department of Investment and Public Asset Management) is now focused on listing the state-run insurance giant. LIC, Though the issue has been delayed due to war, the officials are hoping to ensure that the IPO gets released by the first week of May. Against the backdrop of the pandemic, the Center has reduced the valuation and stake.