InvestorQ : What in your view is the government likely to do now on the BPCL story, going ahead?
ishika Banerjee made post

What in your view is the government likely to do now on the BPCL story, going ahead?

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2 months ago
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To be fair, the first signal of the government decision to withdraw BPCL offer came when it announced mega divestment of Hindustan Zinc. That was the low hanging fruit. The 29.5% stake of the government is worth Rs38,000 crore. Now if you sum up the LIC IPO amount of Rs21,000 crore with the HZL sale, the divestment target is almost there. Since the government is also planning to sell off ITC from the SUUTI portfolio, it will more than meet its divestment target for FY23. BPCL sale was not urgent and could afford to wait.

But, let us look at the bigger challenge; how to eventually make the BPCL divestment work? The only way is to reposition BPCL as a green energy or a futuristic energy company. Companies like Tata Power, Adani, Reliance and NTPC command higher valuations since their business models are in sync with a greener future. Unless, BPCL reflects its green commitments for the long term, big oilcos will not be interested. It is time to move beyond the commodity and price approach. Now, government has to reposition BPCL!

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