New Delhi, March 17: Reliance Industries and global oil major Royal Dutch Shell today entered the race to take over the lucrative blue-chip oil major Hindustan Petroleum Corporation Ltd (HPCL).
Sources said a consortium of Essar group companies, Saudi Aramco, ChevronTexaco of the US and Petronas of Malaysia also filed their expressions of interest (EoIs) today, the last day fixed for the purpose by the disinvestment ministry.
The government is planning to sell off a 34 per cent stake in HPCL to the highest bidder while another 5 per cent of the equity will be offered to employees at concessional rates. The government’s stake in the company will fall to 12 per cent after the selloff. HSBC has been appointed global advisor for the sale.
HPCL is the country’s second largest refining and marketing company next only to Indian Oil Corporation. It clocked a sales turnover of over Rs 34,270 crore for the first nine months of the current fiscal to make a net profit of Rs 903 crore during this period. The company has cash reserves of Rs 5,500 crore. It has contributed over Rs 12,000 crore to the national exchequer during the last fiscal by way of various taxes.
The stock market price of HPCL is currently ruling at around Rs 290 per share. However, oil industry experts are of the view that the speculation-driven Indian stock markets do not reflect the true worth of the company which is worth much more.
“The numerous scams that have rocked the stock markets only go to prove this point,” a senior oil company official remarked.
It is HPCL’s lucrative marketing network, comprising over 4,500 retail filling stations, that private companies like Shell and Reliance have been eyeing. HPCL has a neat chunk of its petrol pumps located in prime areas of big metros where it is impossible to set up new outlets as there is no land available for the purpose.
HPCL also has a large share in the LPG market. It has around 40 LPG bottling plants and 2,000 sales agencies spread cross the country to market the cooking gas. The LPG sales are poised to take a major leap with new state-of-the-art underground storage facilities being built at Vizag.
The company has an oil refinery at Vizag which, apart from Haldia, is the only refinery on the east coast. It has another oil refinery at Mumbai and a 37.4 per cent share in the Mangalore Refineries and Petrochemicals also located on the west coast.