Oilmen move PMO, seek review of BPCL valuation before sale

NEW DELHI: Federation of Oil PSU Officers on Thursday appealed Prime Minister Narendra Modi to reconsider the decision to privatise the country’s second-largest oil refiner and marketer BPCL, saying the government can get much more than it is currently expecting from the sale.
In a letter to the PMO, the umbrella body representing state-run oil company executives said their internal valuation of BPCL was over Rs 9 lakh crore, whereas the government has estimated a receipt of Rs 74,000 crore. “Based on the current market price of the immovable assets, replacement cost of the plant & machinery and brand value, the estimated valuation of BPCL done by an internal team comes to be over Rs 9 lakh crore.”
The government, however, the letter said, is considering BPCL’s current market capitalisation of Rs 1.06 lakh crore and a 30% premium (typically offered for corporate buyouts), the government has estimated a receipt of approximately Rs 74,000 crore through this disinvestment.