The BPCL share price has shown a muted response to the government announcement to divest its entire stake in the company. BPCL’s share price declined by 2.74 per cent to Rs 529 after the market opened on Thursday. The key reason is the anticipation of a lower valuation for the company’s Numaligarh Refinery.
Analysts told BusinessLine that BPCL’s overall valuation could be impacted as the company’s Numaligarh Refinery (NRL) would be carved out, to be taken over by another PSU.
Brokerage house Nirmal Bang is of the view that a share swap for taking over the NRL stake could imply some potential downside to BPCL’s overall valuation. That is if NRL is valued at less than 10 times its price-to-earnings ratio. Such a scenario would impact BPCL’s earnings per share by Rs 6.
