Abstract

In November 2019, the Government of India (GoI) announced the disinvestment of Bharat Petroleum Corporation of India (BPCL) as a part of its plan to meet the fiscal deficit of Rs. 2.1 trillion for the financial year 2020-21. Before the plans could fructify, the economic situation across the world turned volatile due to the COVID-19 pandemic. After postponing the proceedings several times, the GoI finally called for the submission of Expressions of Interest (EoI) from potential bidders at the end of the year 2020. The response was lukewarm as the major players who had evinced an interest in BPCL initially, did not show much enthusiasm due to the prevailing uncertainty in the global markets. The much delayed disinvestment was expected to be completed during the second quarter of the financial year 2021-22. The present case study can be used to discuss the Disinvestment Policy, the rationale behind the disinvestment, the process and procedure for executing the disinvestment strategy, and the related challenges in valuation.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The rationale of the Disinvestment Policy of the Government of India
• The issues and challenges related to Disinvestment proceedings
• The methods and modes of the Disinvestment process
• The pros and cons of BPCL's Disinvestment

Keywords

Disinvestment; Bharat Petroleum Corporation of India (BPCL); Fiscal deficit; COVID-19 pandemic; Expressions of Interest; disinvestment and privatization; Industrial Policy 1956; Industrial Policy 1991; Consolidated Fund of India; Department of Investment and Public Asset Management (DIPAM); NITI Aayog; Ministry of Finance; Vedanta Limited; Apollo Global; I Squared Capital