DELOITTE OFFERS TO MANAGE BPCL SALE FOR RUPEE 1

Strategic disinvestment is transferring the ownership and control of a public sector entity to a private sector entity. Deloitte Touche Tohmatsu (DTT) is one of the members of Deloitte Asia Pacific Limited, a member firm of the Deloitte network. DTT provides audit and assurance & risk advisory services.

 Deloitte Touche Tohmatsu India quoted rupee 1 to manage the sale of BPCL (Bharat Petroleum Corporation Limited) which is likely to fetch the government Rs 70,000- Rs.80,000 crore. BPCL is a Government of India controlled Maharatna oil & gas company headquartered in Mumbai, Maharashtra.

SBI Caps (SBI Capital Market) is a wholly owned investment banking subsidiary of State Bank of India was the second lowest bidder with a quote in the range of Rs 15-17 crore.

The government has set a timeline of 50 days for asset valuation and the process should be completed before March 31, 2020. Presentations were made before the Department of Investment and Public Asset Management on November 28.

Deloitte also quoted the similar amount for Concor (Container Corporation of India). Concor is a Navratna Public sector undertaking under Indian Ministry of Railways.  Ten years ago investment bankers made bids for near-zero started with Rs. 15000 crore as initial public offering( IPO) of Coal India (CIL) to the public. It was also found that Citibank quoted a very low share.

Partha Bhattacharya chairman of CIL during IPO stated that, "They don't look at the cash money they earn for the job and see it as a prestigious move. Deloitte might not have been sure how the next bidder would quote and could have gone for a notional token figure to get their name associated with this."

JM Financial one of India's prominent financial service groups specialising in providing a spectrum of businesses to corporations, financial institutions, high net worth individuals and retail investors.

JM Financial quoted only Re 1 for Oil and Natural Gas Corporations purchase of Hindustan Petroleum Corporation. It was regarded as an aggressive bid.

BPCL shareholding pattern as on Sep 30, 2019

       Government of India - 53.29%

       Domestic Institutional Investors - 17.95%

       Foreign Institutional Investors - 14.58%

       Trust & Foundation 9.33%

       Retail - 2.64%

       Others - 2.21% 

The government has obtained only Rs 17,364 crore through disinvestment transactions in 2019-2020.

Saudi Aramco, Reliance industries, Exxon Mobil are also expected to bid for BPCL.