New Delhi, June 17: The Securities and Exchange Board of India (Sebi) has allowed the government to simultaneously list the National Aluminum Company (Nalco) and Bharat Petroleum Corporation (BPCL) on domestic as well as US bourses.
The government will divest part of its holding in these two state-run corporations through public offers instead of the conventional strategic sale route.
A core group of secretaries will soon give a final shape to BPCL’s proposed issue, divestment ministry officials said. However, no specific time frame has been set for the flotation.
The government wants to divest 35.2 per cent of its total 66.2 per cent holding in BPCL through a combination of a public offer in India and ADRs/GDRs in the global market. It plans to dilute 10 per cent in the domestic market, 25.2 per cent through ADRs and also allot 5 per cent to employees at a concession.
Post-selloff, the government will hold 26 per cent in BPCL. Despite being a minority shareholder, it will retain management control of the oil marketer.
Fuelled by the impending sale of shares, the BPCL stock has been gaining over the last few weeks. The decline in crude prices has been another positive. Crude prices have fallen from $ 38 a barrel before the Gulf war to just over $ 26 a barrel.
As domestic refiners import 70 per cent of their crude requirement, rising crude prices affect margins and profitability of oil marketing and processing companies.
The disinvestment ministry is also planning to submit a proposal to the Cabinet for the sale of residual government holding in Computer Maintenance Corporation (CMC), Videsh Sanchar Nigam Limited (VSNL) and Indian Petrochemicals Corporation Limited (IPCL).
Tata Consultancy Services holds a majority stake in CMC, while Tata Sons has a majority stake in VSNL and Reliance holds sway over IPCL. However, financial institutions and the public also hold significant stakes in these companies.