The government is considering a tweak in the current foreign direct investment (FDI) policy to allow overseas investors to pick up majority stake in India’s second-biggest oil refiner Bharat Petroleum Corp Ltd (BPCL), sources said.
The government is privatising BPCL and is selling its entire 52.98 per cent stake in the company.
For BPCL privatisation, mining-to-oil conglomerate Vedanta had put in an expression of interest (EoI) for buying the government’s 52.98 per cent stake in the PSU. The other two bidders are said to be global funds, one of them being Apollo Global Management.
The proposal is under discussion between the departments of disinvestment (DIPAM), industry (DPIIT) and economic affairs (DEA), they said.
At present, only 49 per cent FDI is permitted through automatic route in petroleum refining by the public sector undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. With this provision, a foreign player would not be able to buy more than 49 per cent stake in BPCL.
According to sources, DIPAM has suggested amending the existing FDI policy in order to allow 100 per cent foreign direct investment in a central public sector enterprise (CPSE) in the petroleum and natural gas sector.
On the other hand, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed for a separate provision for this specific situation.
The proposed amendment to the FDI policy is under consideration for enabling investment in BPCL as part of the disinvestment process, they added.