The Vedanta group will seriously evaluate acquiring the government’s stake in BPCL and will bid for commercial coal blocks that will be offered as it will itself need up to 100 million tonnes to generate power but its decisions would depend on the valuation of assets, its chairman Anil Agarwal said.
Agarwal also said he expects private investment in India to pick up in a year, and that the business community had a lot to gain from the deepening relationship with the US, as evident from the warmth between US President Donald Trump and Prime Minister Narendra Modi. He said the Vedanta Group had placed orders worth $4 billion with US companies for work related to its oilfields. “American companies want to invest in India. We have the same value system. Our credibility is very, very high,” he said.
The government should quickly offer coal blocks and accelerate the process of disinvestment as “the government has no business to be in business,” he said.
“Yes, we are interested in BPCL. There are synergies with our exploration business. We will look at it carefully when the actual offer is made,” he said. Even before the government invites bid, Agarwal has been closely watching the share price movement of BPCL, which has moved in the range of Rs 308 to Rs 550 in the past 52 weeks.
“We have to see the valuation. The share price has moved up 40-50% since the time the government announced its plan to sell stake,” he said.
Bankers, however, expect BPCL’s sale to fetch an even higher price as the buyer would have to pay control premium and the fact that replacement value of BPCL’s asset is considered much higher than the market price.
Agarwal is eagerly awaiting the opportunity to acquire the coal blocks. “We are very keen. We are looking to bring the best international technology and diligently follow environmental norms. We already need 60-70 million tonnes of coal a year. In a few years, our requirement would be 100 million tonnes. India has huge reserves of coal. We should develop those reserves instead of importing coal.”
On the economy, Agarwal said fundamentals were strong and the outlook was good and that private investment would rise significantly in the year.
“People are adjusting to far-reaching changes. Earlier, if you knew a minister or some other important authority, the work would get done. Now, it is a systems-based approach. People are adjusting to the change, but all over the world, it is a systems-based approach, which is a good thing,” he said.
In this context, he said it is important for companies to depend on professional management. “In the West, only small businesses, restaurants etc can be family run for many generations. But if it is a large company, it needs professional management, technology and resources. If you don’t have that then you see the rise and fall of many business families,” he said.
He said investors would happily invest if the climate is right. “The investor does not have a tradition of wars and battles like Rajputs. He will not fight. If the atmosphere is good, he will invest,” he said, adding that the business climate was very positive.
Source: Economic Times