First up is the disinvestment of Bharat Petroleum (BPCL)
The chairman of the company has said that the gov intends to complete the strategic stake sale before the end of March 2022, i.e., within the current financial year.
It was earlier expected to be comfortably completed by then, but in September, credit rating agency Fitch Ratings said there could be delays because it's a big deal and there are issues with valuation and bidder consortiums.
Vedanta, Apollo Global, and I Squared capital are the three parties that have been most interested in this deal.
The complications are because this is a ‘strategic stake sale’, where the gov is selling a controlling stake of ~53%, and at the current stock price this is worth over Rs 50k crores.
Also, the acquirer might have to make an open offer to buy out the 2 other large shareholders of BPCL - Petronet LNG and Indraprastha Gas Ltd.
They’ve already asked SEBI for permission to skip this step, but if they don't get it, it would cost the acquirer an extra Rs 19,000 crores.
You must have seen a lot of news articles over the past year or so about increasing LPG cylinder prices. They’ve risen ~Rs 300 since May 2020. From Rs 580 to Rs 880 per cylinder in Delhi.
That’s because when the pandemic hit, international gas prices crashed. So the gov used this as an opportunity to save some money and removed the subsidy. They managed to save ~Rs 20k crores by doing this.
However, prices have risen sharply since and people are really starting to feel the pinch. But the subsidy has not been reinstated yet.
Now Business Standard reports that the Oil Ministry is re-evaluating its options to figure out a balance between a cylinder price that people will be able to afford and the amount of subsidy that can be given.
One of the options also being considered is to limit subsidies only to Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries.