While the Narendra Modi-government has pinned hopes on BPCL privatisation to meet its FY21 disinvestment goal, rating agencies are not sure how the stake sale will play out on the balance sheet of the company. Fitch Ratings said that it continues to treat the potential divestment of BPCL as an \u2018event risk\u2019, in absence of clarity over crucial info. \u201cWe continue to treat the potential divestment of BPCL by the Indian state as an event risk, as there is little information about bidders, valuation, and the potential transaction structure,\u201d Fitch Ratings said in a report on Tuesday.<\/p>\n
Government plans to sell all of its 53% stake in the company. Affirming BPCL rating to BBB-, Fitch said that BPCL owns assets across many verticals, and bidders may not find them interested in all of them. The government has pushed the deadline for Expression of Interest (EoI) to 30 September 2020. This is the third time since the government extended submission deadline since the initial announcement in November 2019.<\/p>\n
\u201cThe slow progress has been due to a near halt in international travel to India and a generally cautious investment approach by most entities in current market conditions, in our view,\u201d Fitch Ratings said. The rating agency will now monitor further developments and reassess rating if the sale progresses.<\/p>\n
What\u2019s dragging BPCL\u2019s credit rating?<\/p>\n
With the economy facing the headwinds of the coronavirus pandemic, Fitch Ratings this week cut India\u2019s growth projection. The agency linked BPCL rating with the sovereign as the government owns a majority stake in the oil and gas company. \u201cFitch equalises BPCL\u2019s rating with that of its largest shareholder, the India sovereign (BBB-\/Negative), based on Fitch\u2019s Government-Related Entities Rating Criteria, due to the strong likelihood of government support. The Negative Outlook reflects that on the Indian sovereign,\u201d it said. Moreover, there is a generally weak demand for petroleum products and gross refining margins (GRMs) in the near term also weigh down.<\/p>\n
With a reaffirm in BPCL ratings, that of its subsidiary BPRL International Singapore Pte Ltd\u2019s US dollar guaranteed notes has also been revised at \u2018BBB-\u2018.<\/p>\n","protected":false},"excerpt":{"rendered":"
While the Narendra Modi-government has pinned hopes on BPCL privatisation to meet its FY21 disinvestment goal, rating agencies are not sure how the stake sale will play out on the balance sheet of the company. Fitch Ratings said that it continues to treat the potential divestment of BPCL as an \u2018event risk\u2019, in absence of clarity over crucial info. \u201cWe continue to treat the potential divestment of BPCL by the Indian state as an event risk, as there is little information about bidders, valuation, and the potential transaction structure,\u201d Fitch Ratings said in a report on Tuesday. Government plans to […]<\/p>\n","protected":false},"author":39,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-372847","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/372847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=372847"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/372847\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=372847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=372847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=372847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}